8.2
The assessment that follows evaluates the cost of the Stadium project with
its economic benefits. It must be understood that the primary rationale for
the project is its benefit to the sports infrastructure in Ireland. Such benefits
are not amenable to economic evaluation. As such the investment by the State
in the Stadium must be seen in broad strategic terms.
8.3
We present estimates of the socio-economic impact of the Stadium project
using cost-benefit analysis (discussed Appendix 8.1). The financial costs and
benefits of a publicly-funded project are only part of the true social costs
and benefits to the economy, which could include non-financial items such as,
for example, the additional cost inherent in the use of public funds, and the
environmental costs of proceeding with the proposed development. Some of the
non-financial items may be difficult to quantify precisely. However, it is useful
to consider the social costs and benefits when assessing the socio-economic
impact of the proposed National Stadium.
8.4
It is important in cost-benefit analysis to clearly identify the social
benefits and social costs which are included in the calculations. We begin by
outlining the benefits and costs which have been considered. In placing a value
on these costs and benefits we make certain assumptions about their size and
impact and these assumptions are also discussed below. Finally we present the
results of our analysis.
8.5
Table 8A identifies the main benefits and costs which are addressed in the
analysis.
Table 8A Identification of Main Benefits and Costs of National Stadium
Potential Benefits
Employment Creation Tax Contributions
Tourism Benefits Impact on Property Values
Sporting Benefits
Main Costs
1
1
Page 2
3
Capital Costs Costs of Traffic Congestion
Impact of Disruption to Local Residents
Capital cost of proposed Stadium and Ancilliary Facilities
8.6
Based on the proposed footprint and design of the Stadium, Table 8B below
sets out a breakdown of the estimated capital costs of the project. The figures
indicate an estimated total capital cost for the proposed 80, 000 seat Stadium
of £168 million plus ancilliary costs.
Table 8B Estimated Capital Costs for Proposed 80,000 Seat
National Stadium and Ancilliary Facilities
Item IR£ million (excluding VAT) 80,000 seater Stadium construction + fit-out
160
Site infrastructure 8
168
Local infrastructure 13
Professional fees 17
Design contingency 32
Total 230
Source: PricewaterhouseCoopers
8.7
For the purposes of the cost-benefit analysis we distinguish between sources
of capital which are public and those which are financed via private donations.
Table 8C presents a breakdown of the capital costs of the proposed Stadium according
to the known sources of finance for the project, being public funds, with the
balance (£ 50 million) coming from a private donation. If any additional elements
of the capital costs are financed by private sources, for example by sponsorship-related
pre-funding, this would improve the socio-economic impact. We understand the
Steering Committee believe it may be possible to increase the percentage of
funds from the private sector.
Table 8C
Sources of Funding for Proposed Stadium
Sources of capital IR£ million
Public funding 180 2
2 Page 3 4
Private donations 50
Total 230
8.8
Only the publicly funded element of the total capital costs are included
in the socio-economic cost calculations. This is due to a high marginal socio-economic
cost being attached to the use of public funds, which are raised by the government
through taxation, the latter having a distortionary impact on the economy. Private
donations have no such socio-economic cost. On the benefits side it is necessary
to consider the additional employment and other benefits that derive from the
total capital cost.
Construction phase and lifetime of proposed Stadium
8.9
The construction phase of the project will be four years from go-ahead to
completion. Furthermore, it is normal procedure in assessing large-scale public
capital investment projects to consider a finite lifetime for the project. We
consider a lifetime of 20 years from the time of completion of construction
to be appropriate for the Stadium. The timeframe of the expenditure during construction
is set out in Table 8D. This shows that 10% of the capital expenditure is assumed
to take place in year 1, while 30% is expected to take place in each of the
remaining three years of construction. The benefits arising from this expenditure
are assumed to be distributed in the same fashion.
Table 8D Timeframe of Expenditure during Construction Phase
Year Percentage of capital spending Capital spending -£ million
1 10% 23
2 30% 69
3 30% 69
4 30% 69
Total 100% 230
Operational details of proposed Stadium
8.10
For figures on the anticipated usage of the Stadium we use the minimum utilisation
developed by PricewaterhouseCoopers, that six sporting events will take place
each year. Four of these are assumed to have average attendances of 46,250 while
the other two events have average attendances of 40,000.
Issue of economic deadweight and displacement
8.11
3
3
Page 4
5
In assessing the socio-economic benefits accruing from a project it should be
noted that the additional benefits flowing from the project will not necessarily
equal the total investment in the project, since significant economic activity
may occur automatically even in the absence of such development. In other words,
it is necessary to consider the economic deadweight that occurs. The deadweight
concept discussed in Appendix 8.1 refers to the likelihood that an outcome or
benefit would have occurred without the project or investment programme. Displacement
refers to the extent to which the project may cause other activities that might
have contributed to achieving the desired benefits to be cancelled or reduced.
Displacement can occur internally (within the proposed project) or externally
(distorting activities elsewhere in the economy). Although quantifying precisely
the extent of economic deadweight is difficult, it is worth noting that in general
during periods of rapid economic growth the potential for the creation of deadweight
is likely to increase.
Social Benefits
8.12
There are a number of issues to be taken into account in assessing the social
benefits arising from a large-scale project such as the proposed National Stadium.
In summary, the principal benefits are those involving the following:
. Income generated from initial construction of the project, including employment
and other factor income;
. Incomes generated through direct employment created during the operational
life of the Stadium;
. Income generated through the second-round or induced impacts on the economy
of the construction and employment activity at the proposed Stadium;
. Expenditure and incomes generated through the use of the Stadium by visitors
from outside the state;
. Exchequer income generated through the tax receipts arising from the initial
construction phase of the project, including income tax, national insurance
contributions, corporation tax on profits earned by the construction companies,
and indirect taxes;
. Exchequer receipts in the form of income taxation arising from operational
employment at the proposed Stadium;
. Exchequer revenues generated from expenditure by visitors to the Stadium
outside of the Stadium;
. Exchequer revenues arising from the second-round impacts on the economy
of the proposed Stadium;
. Tax revenues arising from the corporation tax payments from profits generated
during the operational life of the Stadium;
. Increased property values arising from the location of the proposed Stadium.
8.13
In addition there are sporting benefits which, while not readily quantifiable,
are usually the main rationale for Stadium investments. A similar point applies
to issues such as civic pride and the image of the city.
Direct Incomes generated during construction phase
8.14
4
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Page 5
6
The socio-economic benefits arising from a project of this scale begin at the
construction phase with the impact of the capital expenditure. A substantial
proportion of the capital expenditure will be in the form of incomes paid to
construction employees. A key issue relates to what opportunity cost is applied
to these incomes. This is discussed further in our analysis.
8.15
We have based our estimates for the additional employment income created
during the construction phase of the project on the findings of Henry 1. Henry's
modelling of the Irish economy indicated that 1 full-time employee (FTE) was
created for each £45,500 spent in construction in 1990. Assuming that construction
cost inflation averaged 4% per annum between 1990 and 2000, it then follows
that 1 FTE is created per £67,351 spent in construction in 2000 prices. Based
on the assumed timeframe of capital expenditure (see Table 8E), this suggests
that 341 FTEs are likely to be created during year 1, and 1,024 FTEs in each
of the remaining three years of construction.
8.16
Average wages per FTE in construction are estimated at £18,675 in 1998 prices.
2 This figure assumes that 50% of employees required during the construction
phase of the proposed Stadium are skilled. Adjusting this figure for wage inflation
during 1999 and 2000 (assumed at 6% per year) gives an estimate for the average
wage in year 2000 of £20,983. Based on this estimate, and the number of full-time
employees created, this suggests that additional gross employment income
would be generated to the tune of £7.2 million in year 1, followed by £21.5
million in each of the remaining three years during construction. We have adjusted
these figures downwards, however, by 80% to reflect the opportunity costs of
labour. This reduces the estimated direct additional benefit of the Stadium
to £1.4 million in year 1, followed by £4.3 million in each of years 2 to 4.
While assuming a 80% opportunity cost of labour is high compared to some previous
studies we believe it is appropriate given the current low levels of unemployment
in Ireland. Indeed there would be a case for assuming a 100% opportunity cost.
Our analysis takes account of employment levels in the local catchment area
and the need to assess this over the life of the project and not simply the
current labour market conditions.
8.17
It is also necessary to subtract taxation from the estimates of gross employment
income indicated above, since it is net incomes that are considered as
a benefit in terms of the additional employment created during construction.
Taxation is then treated separately as a benefit accruing to the exchequer.
Here we assume that all gross direct employment incomes (after adjusting for
the opportunity cost of labour), are subject to an effective tax rate of 25%,
implying tax revenues of £0. 36 million in year 1, followed by £1.08 million
in each of years 2 to
4. This implies that net incomes total £1.1 million in year 1, followed by £3.2
million in each of years 2 to 4.
Second-round or induced impacts of construction activity
8.18
On top of the direct employment incomes generated during construction additional
employment incomes will be created as a result of multiplier impacts arising
from the downstream effects on the economy of the construction activity. Deane
and Henry (1993) 3 calculated that each £1 million spent on construction in
1992 had multiplier impacts amounting to the generation of 24.4 new full-time
jobs in indirect and induced employment. We have adjusted this estimate for
inflation between 1992 and 2000 (assumed to average 4% per annum), giving a
new estimate of 17.8 other jobs per £1 million spent in the construction sector
in the year 2000. Based on this multiplier impact, we have estimated that an
additional 409 full-time jobs would be created during year 1, and 1,228 jobs
in each of years 2 to 4. A detailed analysis of both the direct and indirect/
induced employment created during the construction phase of the project is presented
in Table 8E below. The figures indicate that a 5
5 Page 6 7
total of 7,506 full-time jobs could be created from the Stadium project over
the four year construction period.
Table 8E Estimated Direct and Indirect/ Induced Employment created during
Construction Phase
Year Direct employment – FTEs Indirect/ induced employment -FTEs Total –
FTEs
1 341 409 750
2 1,024 1,228 2,252
3 1,024 1,228 2,252
4 1,024 1,228 2,252
Total 3,413 4,093 7,506
Source: Indecon calculations based on Henry (1993) and Dean and Henry (1993).
8.19
We have estimated the additional incomes that are likely to accrue from
the indirect and induced employment created on the basis that the projected
average annual gross industrial wage in 2000 reaches a level of £17,113. Applying
the employment numbers to this figure gives an estimate of the additional gross
incomes generated through the multiplier impacts arising from construction
activity of £7 million in year 1, followed by £21 million in each of years 2
to 4. Again we assume that only 20 per cent of this income represents a benefit
of the project, reflecting the assumption of an 80% opportunity cost of labour.
8.20
The tax benefits to the exchequer arising from the additional incomes generated
through the multiplier effects amount to £0.35 million in year 1, followed by
£1.05 million in each of years 2 to 4. These estimates are also based on the
average tax contribution of 25% assumed earlier.
8.21
Subtracting the taxation accruing from the additional incomes generated
through multiplier impacts gives a total for after-tax additional incomes generated
of £1.1 million in year 1, followed by £3.15 million in each of years 2 to 4.
This net income is shown as a benefit arising from the proposed project as indicated
in Table 8A in Appendix 8.8.
Non-employment exchequer benefits during the construction phase
In addition to the exchequer benefits that arise from the additional
employment incomes generated during the construction phase, further revenues
are generated through taxation on construction expenditure. An analysis of the
total estimated benefits accruing to the exchequer during the construction phase
of the project is presented in Table 8F below. We have assumed that expenditure
on construction generates tax revenues equivalent to between 25-30% of expenditure.
However, given that some of this tax revenue would have occurred in any event
(for example, due to income from labour which has an opportunity cost), we have
used a lower figure of 15%. This would indicate an additional tax benefit of
£3.5 million in year 1, followed by £10.4 million in each of years 2 to 4. 6
6 Page 7 8
Table 8F Exchequer Benefits from Construction Expenditure
Year Taxes on construction expenditure -£ million
1 3.5
2 10.4
3 10.4
4 10.4
Total 34.7
Source: Indecon calculations
Incomes generated through direct operational employment
8.23
Following completion of the construction phase the operation of the Stadium
will generate incomes for both permanent and casual staff. An analysis of the
projected wage & salary costs accruing during the operational phase of the
proposed Stadium is presented in Table 8G below. The figures indicate a total
gross income from operational employment of £899,000 per year. This total includes
incomes earned by permanent employees of the Stadium, Stadium event-related
staff, contract cleaners, and annual professional fees. Again we assume that
only 20 per cent of this income represents an additional social benefit of the
Stadium project. After adjusting for the opportunity cost of labour, the additional
social benefit of direct operational employment amounts to £0.18 million in
each year during the operational life of the Stadium.
Table 8G Operational Employment Incomes of Proposed Stadium
Permanent staff Annual Salary Number Total Salaries
CEO 80,000 1 80,000
PA to CEO 15,000 1 15,000
Commercial/ Marketing Mgr 40,000 1 40,000
Marketing Assistant 15,000 1 15,000
Operations Mgr 40,000 1 40,000
Operations Assistant 15,000 1 15,000
Financial Mgr 40,000 1 40,000
Head Groundsman 40,000 1 40,000
Groundsmen 15,000 4 60,000
7
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Page 8
9
Building maintenance 15,000 4 60,000
Security 15,000 4 60,000
Accounts assistant 20,000 1 20,000
Secretarial/ Reception 20,000 2 40,000
A Total permanent staff 23 525,000
Other annual costs
B Professional Fees --125,000
C Total ongoing operational employment incomes per year (A+ B) 650,000
Event-related staff Cost per item -£ No. required Total Incomes per Event
Stewards/ turnstile staff 50 300 15,000
Security 50 160 8,000
Gardai 120 100 12,000
Medical --2,500
Total 37,500
D Total event-related employment incomes * 6 events per year 225,000
E Contract employment:
Cleaners 12,000 2 24,000
Total estimated annual operational employment income (gross) (C+ D+ E) 899,000
Source: PricewaterhouseCoopers projections
8.24
The estimates provided above for additional annual employment income generated
during the operational lifetime of the proposed Stadium are gross, i. e. it
is necessary to subtract taxation, which is treated as a separate benefit accruing
to the exchequer. The annual taxation (assuming an effective tax rate of 25%)
amounts to £0.04 million in each year during the operational phase. This tax
revenue accrues as an additional social benefit to the exchequer. After subtracting
taxation, the net additional operational employment benefit amounts to £0.135
million per annum. 8
8 Page 9 10
Multiplier impacts arising from direct operational employment
8.25
In addition to the direct economic benefits of the operational employment
income generated by the Stadium, the direct impacts outlined above will also
cause significant second-round or induced impacts. Money spent from operational
employment incomes will lead to additional private consumption elsewhere in
the economy and contribute to further employment creation and further economic
benefits. Our estimates of the overall benefits arising during the operational
phase include an estimate for such multiplier impacts.
8.26
We have based our estimate on Henry (1993), which show that £1 million of
household expenditure in 1990 led to employment creation of 24. 5 man years.
Adjusted for inflation between 1990 and 2000 (at 2% per annum) we have estimated
that £1 million of household expenditure in 2000 would lead to the creation
of 20.1 man years of employment. We have then applied a marginal propensity
to consume of 0.85 to the net of tax operational employment income to arrive
at an estimate of household spending in each year. This gives an estimate of
11.5 new full-time jobs per year created through multiplier impacts. Assuming
an average industrial wage of £17,113 in the year 2000 implies an additional
gross employment income of £197,142 per year arising from second-round impacts
from direct operational employment. Adjusting for an opportunity cost of 80%
would imply a net additional social benefit per year of £0.039 million in gross
terms. This is equivalent to £0.03 million per year after tax.
Indirect and induced benefits arising from out-of-state visitors to
Stadium
8.27
In addition to the multiplier impacts arising from direct operational employment,
the spending of out-of-state visitors to the Stadium will generate further socio-economic
benefits. We have estimated the size of these benefits by considering projections
for the number of out-of-state visitors that are likely to visit the Stadium
during the projected 6 annual events hosted. An analysis of the projections
is presented in Table 8H below. Based on the minimum utilisation it is projected
that 69,650 out-of-state visitors would attend the Stadium each year. For the
purposes of this study we assume that only 25 per cent of these visitors, or
17,413 people, will be additional in that they would not have travelled to Ireland
in the absence of the proposed Stadium.
Table 8H Estimated Proportion of Visitors from Outside the State
Attending Events at National Stadium
Event Attendance Proportion From Outside the State Numbers From Outside the
State
Additional out-of-state visitors
4Rugby Internationals 185,000 29% 53,650 13,413
2 gaelic games 80,000 20% 16,000 4,000
Total 265,000 27.8% 69,650 17,413
Source: PricewaterhouseCoopers projections of attendees
8.28
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11
In Appendix 8. 3 we present projections for average expenditure per overseas
visitor to Ireland based on Bord Failte forecasts. The projected level of spending
per foreign visit in 2000 is £462.41. Applying this average spend to the expected
number of additional out-of-state attendees gives an estimated revenue of £8.1
million per year. This figure gives an estimate of the benefit to the Irish
economy from the out-of-state attendees in each year as a result of the Stadium
project.
8.29
According to Henry (1997) 4, 19.99 indirect and induced full-time jobs were
created in Ireland in 1995 for every £1 million of foreign tourist earnings.
Adjusting this for inflation between 1995 and 2000 (at 2% per annum average)
gives an estimate for employment generation of 18.1 new full-time jobs per £1
million generated from foreign tourism revenues in 2000. Applying this to the
overall estimate for additional annual revenue of £8.1 million suggests that
147 new full-time jobs would be created in each year during the operational
life of the proposed Stadium as a result of the indirect and induced benefits
of additional out-of-state visitors. Assuming that the average industrial wage
reaches a level of £17,113 by the year 2000, this would imply an annual additional
gross income benefit to the economy of £2.5 million. This would amount to a
net £1.9 million per year after tax.
Exchequer receipts arising from operational employment
8.30
The additional incomes generated through both the multiplier impacts stemming
from direct operational employment (after adjusting for the opportunity cost
of labour) and the impact of tourism expenditure will also carry benefits for
the exchequer via tax revenues. Based on an average effective tax rate of 25%
total tax revenues from these incomes during the operational phase would amount
to £0.7 million per year.
8.31
A summary of the estimated exchequer benefits arising during the operational
phase of the proposed Stadium is presented in Table 8I below. The figures indicate
a total estimated exchequer gain in each year during the operational phase of
the proposed Stadium of £0.74 million.
Table 8I Annual Exchequer Benefits arising during Operational
Phase of Stadium (adjusted for opportunity cost of labour)
Years Tax revenues from direct operational employment incomes -£ million
per operational year
Tax revenues from indirect and induced employment incomes -£ million per operational
year
Total exchequer gains -£ million per operational year
5 to 24 0.04 0.7 0.74
Source: Indecon calculations
Increased property values in the vicinity of the Stadium
8.32
A potential benefit arising from the location of the proposed Stadium which
would require consideration would be the impact on property prices in the vicinity
of the Stadium. The location of the project in an area which is currently under-developed
would be likely to increase the attractiveness of the area for further development
and thus increase the long-term economic benefits of the project. We do not
currently have an accurate basis on which to 10
10 Page 11 12
assess the magnitude of this impact. Some indication could be derived by looking
at the number of households and commercial premises in the area, assigning some
specified increase in average property prices and then aggregating to obtain
an indication of the total of increased property values. While this would give
an impression of precision there really is no sound basis available for assessing
the likely change in the value of property, and so we do not proceed with such
an approach.
8.33
An alternative approach used in Bacon (1998) 5 suggested that the proposed
national convention centre project would lead to an increase in property values
(including the centre itself) of £56.6 million in 1999 prices. This was relative
to a capital investment in the project (including the cost of acquiring land)
of £104 million. However, in relation to the proposed National Stadium, it is
also important to take account of the fact that for some residents and businesses
in the immediate vicinity, the Stadium could lead to a reduction in the quality
of life and in property values due to congestion and other negative environmental
impacts. This is reflected in the planning objections that occur to various
other projects of a large-scale nature. On balance, we make a somewhat arbitrary
assumption that the net present value of increased property values as a result
of the proposed Stadium would be of the order of £30 million in year 2000 prices.
8.34
It is standard procedure as part of a cost-benefit analysis of this kind
to assign a residual or liquidation value to the property concerned. This residual
value would be entered as a benefit in the last year of the assigned lifetime
of the project (in this case 20 years from exemption of construction). The benefits
would arise from the sale of the Stadium building and surrounding facilities.
We have assumed for the purpose of this analysis that the value of the property
in 2024 equals one third of the initial capital cost of the project i. e. £76.7
million.
Summary of social benefits
8.35
Table 8J summarises the main potential benefits of the project which have
been considered in this analysis and the value associated with each. The analysis
indicates that after taking into account all the estimated benefits of the proposed
Stadium the present value of the benefits totals £138.0 million in 2000 prices.
Table 8J Potential Benefits of National Stadium in Present Value Terms
Benefit Estimated present value assuming 5% discount rate (£ million)
Employment (excluding tourism benefits)
-no. of jobs during construction 7,506 (direct and induced)
-no. of operating jobs 23 permanent, 560 event-related
Estimated value of employment income (excl. tourism benefits) (assumes 80% opportunity cost) 21.5
11
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13
(assumes 80% opportunity cost)
Tax Contributions
-estimated total tax receipts 43.3 (NPV of tax contributions shown in Table
1, Appendix 8.3 discounted at 5% per annum)
Tourism Benefits
-total estimated tourists 19.4 (assumes that only 25% of total represents
additional tourists)
Sporting Benefits
-likely to be the main rationale for investment
-not amenable to quantification -
Residual value of Stadium 23.8
Increased Property Value in Vicinity of Stadium 30.0
PRESENT VALUE OF TOTAL BENEFITS (assuming 5% discount rate) 138.0 Social
Costs
8.36
For the purposes of assessing the economic impact of a project such as a
Stadium investment it is necessary to identify the social costs involved before
estimating the value of their impacts. A publicly-financed Stadium project is
likely to incur a number of social costs. In this analysis we consider two of
the main costs, namely:
a. Capital invested at the construction phase;
b. Traffic congestion associated with the project.
8.37
It would also be necessary to consider any public funds which might be required
to fund any operational deficit. However, based on PricewaterhouseCoopers analysis
it is estimated that no such deficits will occur.
Capital invested at the construction phase
8.38
The capital cost of the project which will be funded from the exchequer
amounts to £180 million. It is important to note that the capital invested in
the project may imply a social cost 12
12 Page 13 14
greater than the public monies used. This is because raising public money requires
taxation and taxation can cause distortions to economic activity. As noted previously,
it may be possible to further reduce public sector costs by increasing the percentage
of funds from the private sector.
Traffic congestion associated with the project
8.39
In addition to capital costs the other main cost would relate to traffic
congestion. It is useful to consider this in some more detail. The implied cost
of the extra traffic congestion generated by a new Stadium must be considered
as a social cost. The impact of traffic congestion on the surrounding road network
is likely to begin with the commencement of construction activity at the proposed
site. Thereafter significant congestion may be experienced on days and evenings
of major sporting and other events.
8.40
The social costs of congestion arise from the delays incurred. The consequent
loss of productivity to businesses from increased delivery times is relatively
straightforward to measure. On the other hand there is a notional loss of utility
to non-commercial drivers as a result of delays caused by traffic. While Dublin's
traffic problems are already widely recognised any additional source of delays
will have some, albeit reduced, marginal cost.
8.41
Measures of the social costs associated with traffic delays in Ireland have
been calculated by DKM consultants. The cost of lost working time due to traffic
delays is estimated at £9.20 per hour while lost non-working time is estimated
to cost £3.70 per hour. Both of these figures are at 1994 prices and are inflated
at 4 per cent per annum to account for wage inflation.
8.42
By assuming that 50 per cent of vehicle occupants affected by the congestion
are on working time we calculate the cost of congestion as £8.16 per hour. Assuming
that each vehicle has an average of two occupants this equals £0.27 per minute
delay per vehicle.
8.43
A detailed analysis of projected traffic congestion costs of the proposed
Stadium is presented in Table 8K below. The analysis shows the estimated impact
on existing traffic flows on key roads in the vicinity of the proposed Stadium
of the planned 6 annual events. A critical element of the workings is the assumption
that the additional traffic introduced while each event takes place at the Stadium
results in an average delay per existing vehicle of 5 mins. Our analysis indicates
a total estimated traffic congestion cost per event of £29,462. Given the planned
6 events per year at the Stadium this would imply a total estimated annual traffic
congestion cost of £176,774. This figure represents as a social cost of the
proposed Stadium. Over the 20 year period this amounts to £3.5 million.
Table 8K Analysis of Traffic Congestion costs of Proposed Stadium
AADT (1996) Est. 2000 AADT Estimated hourly traffic (grow 1996 at 7% p. a.)
Traffic figures from NRA via Thorburn Colquhoun Engineers
N3 (Dublin-Navan)
13
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15
Roundabout NW of M50 on Blanchardstown By-Pass 38,552 50,534 2,106
M50 junction 38,848 50,922 2,122
Roundabout SW of M50 at junction with Auburn Avenue 29,219 38,300 1,596
N2 (Dublin-Ashbourne)
North of M50 12782 16755 698
South of M50 12790 16765 699
Sum of above traffic flows 132,191 173,275 7,220
Cost of working time (according to DKM (1994))
Cost per hour of delay £ -1994 prices £ -2000 prices
Working time 9.2 11.6
Leisure time 3.7 4.7
Assume 50% of vehicles passing Stadium vicinity are on working time 8.2
Assume vehicle has average of 2 occupants
Costs per hour of delay 16.3
Cost per minute of delay (pence) per vehicle 0.27
Assume 5 minute delay per vehicle
Cost per 5 minute delay 1.36
Total projected hourly traffic flow in vicinity of proposed Stadium is 7220 vehicles
Average 3 hourly flow would be 21660 vehicles
At 5 min delay per vehicle, cost is (£) 29,462 per event
This is delay to vehicles excluding those going to Stadium
Estimated traffic costs for 6 events -£ 176,774 14
14 Page 15 16
Summary of present value of costs and benefits
8.44
An analysis of the present value of the gross socio-economic benefits (excluding
capital costs and traffic congestion costs) of the proposed Stadium is presented
in Table 8L. The figures indicate a total gross benefit of £138.0 million. The
figures in Table 8L do not include any value of the sporting benefits. Such
benefits are not readily amenable to economic valuation but are clearly the
primary rationale for the project.
8.45
The gross socio-economic benefits need to be compared to the social costs.
The estimated public sector capital costs amount to £180 million. This assumes
a £50m private sector donation. If the private sector contributions are increased
this will result in a corresponding reduction in public sector capital costs.
As well as the capital costs the social cost of traffic congestion should be
included. The traffic costs are estimated to be £3.5 million. The costs of the
project should be evaluated against the economic benefits and of even greater
importance against the value attributable to sporting benefits. Such benefits
are not amenable to economic valuation but are clearly the primary rationale
for the project.
Table 8L Summary of Present Value of Gross Socio-Economic Benefits of Proposed
National Stadium (excluding capital costs and traffic congestion costs) £ million
(Year 1 prices)
Gross Socio-Economic Benefits IR£ million -Year 1 prices
Discount rate = 5%
Additional Employment
Construction phase 9.4
Direct operational 1.4
Multiplier effects (indirect and 30.1
Induced impacts from above)
A TOTAL 40.8
Exchequer Benefits
B TOTAL 43.3
C Increased property values in 30.0
Vicinity of Stadium
D Residual value of Stadium 23.8
Total gross socio-economic benefits (A+ B+ C+ D) 138.0 15
15 Page 16
(A+ B+ C+ D)
8.46
It is clear that the National Stadium project is being undertaken as a flagship
project to showcase what is best about our society. The benefits of this in
national terms is not quantifiable. Neither is its impact in terms of boosting
morale, enrichment of Irish culture and benefits to young people. 16