The financial benefits of the proposed light metro for Malta will outweigh the costs after 37 years of operation, according to feasibility studies published on Monday.
The value-for-money assessment found that the project would incur €5.5 billion in costs, with an estimated benefit of about €7.5 billion and the breakeven point coming after 37 years.
The government is proposing a 35km track with three lines and 25 stations, aimed at improving connectivity to some of the most congested and densely populated parts of the island.
With the feasibility studies drawn up by London-based consultancy firm Arup now published, the tangible value of the system comes under added scrutiny. At full capacity, the metro lines would be able to carry about 54 million passengers annually.
One of the major questions is: will enough people choose to commute by metro rather than by private car?
By the study’s own estimates, the proportion of morning commuters using public transport – both buses and metro – would go up from 17 per cent to 22 per cent with full implementation of the planned system.
By 2050, this would save 706 million hours spent in traffic every year and €23 million in fuel costs. The average duration of a journey by public transport would go down by 48 per cent to 12 minutes per trip, with the metro saving 25,000 tonnes of carbon dioxide pollution per year.
The move to public transport would also prevent 263 traffic accidents every year, one of which is fatal.
On the other side of the equation, the yearly running costs of the metro would amount to about €63 million, according to the studies. This is based on financial estimates made in 2017, the year the study was commissioned.
If the full project is implemented, Arup estimates initial costs of construction would amount to €4.3 billion by 2050.
It estimates there will be a funding gap – the difference between the money currently available for the project and the money required to build it – of €2.3 billion.
This would average at €10 million a year during development, €286 million during construction and €302 million during operations.
The base case study in the report assumes that capital costs would be financed using government-raised debt but recommends that additional funding be found from other sources.
The study says that a public-private partnership, rather than the government seeking conventional procurement at an agreed price or coming to a concession arrangement, would likely yield the most advantageous results.
The indications are that the construction of the project would take somewhere between 15 and 20 years, with Arup suggesting that workers could be breaking ground as early as 2024.
Initial plans show that phase one construction would be carried out between 2024 and 2029, phase two between 2030 and 2033 and phase three between 2034 and 2036.