THE Metro North light-rail system linking Dublin city centre with the airport and Swords will cost €2.5bn, a third less than expected.
And although the project has yet to be given the green light by government, the Railway Procurement Agency (RPA) has spent €175m to date buying land, carrying out pre-construction work and planning the line.
The project was expected to cost €3.7bn but bidders are providing estimates much lower than anticipated, sources said.
This is partly due to an across-the-board reduction in costs and a lack of major projects across the EU at construction stage.
"The cost of metro systems varies between €100m and €200m per kilometre; we expect this to cost about €2.5bn (€138m per kilometre)," one source said.
"The price will be determined when the contract is signed, but each of the Luas lines came in under budget. We've spent €135m so far. That includes €25m on enabling (pre-construction) works, and another €25m on land acquisition. The rest has gone on planning, design and site investigations."
Metro North is an 18km light-rail system that will run from St Stephen's Green to Belinstown, north of Swords, and link with the Mater Hospital, DCU, Ballymun and Dublin Airport.
An Bord Pleanala will rule later this month whether permission should be granted for the project.
It is a priority project in the Renewed Programme for Government, and funding has been set aside in the revised capital expenditure programme announced last July.
Although it needs final sign-off from the Government, Transport Minister Noel Dempsey has repeatedly said it will go ahead. It will create some 4,000 full-time construction jobs -- with another 2,000 indirect jobs expected to be created.
It is the biggest infrastructure project planned in the EU for 2011, and the European Investment Bank (EIB) has already approved a €500m loan towards the costs.
This guarantee from the EIB will make the markets look more favourably on the project, but financing may yet prove difficult.
"The EIB only commits to projects after taking the innards out and stamping all over them," a government source said.
"The cost-benefit analysis is much stronger than it was even this time last year. For every €1 spent you get €2 back. A final cost-benefit case will be put to government once the An Bord Pleanala ruling comes in."
A revised business case for the project seen by the Irish Independent says that even if there is no economic growth or rise in population in the coming years, more than 30 million passengers a year will use the system -- more than the two Luas lines combined.
It also warns that if the Government does not approve the project shortly after An Bord Pleanala rules, all major public transport projects being built under Public Private Partnership models could be at risk.
See Review section