railway procurement agency · rpa al report 2012 03 81,000 average daily passengers 37.0 kilometres...

RailwayPRocuRementagency

annualRePoRt2012

Contents

Chairman’s Statement 02

Chief Executive’s Review 04

Operating and Financial Review 08

Agency Information 16

Members’ Report 18

Independent Auditors’ Report 24

BusinessReview

FinanCialReview

Income and Expenditure Account 26

Statement of Total Recognised Gains and Losses 27

Reconciliation of Movement in Members’ Funds 27

Balance Sheet 28

Cash Flow Statement 29

Notes to the Financial Statements 30

02 RPA ANNUAL REPORT 2012

During 2012, An Bord Pleanála granted a railway order for the 5.6km extension to the Luas Green Line between St. Stephen’s Green and Broombridge. The Minister for Transport, Tourism and Sport, having informed the Cabinet, announced in November 2012 that the project could proceed to construction. This is a very welcome development and will finally see the Red and Green lines linked to form a true light rail network. It is expected to generate an extra 10 million passenger journeys on Luas in a full year.

A significant amount of planning work was completed on the merger of RPA and the National Roads Authority (NRA) during 2012. The merger, which is a key element of the Government’s Public Service Reform plan, will merge two successful organisations to create an organisation which will be a leader in the delivery of transport infrastructure and services in Ireland.

I would like to take this opportunity to thank the Board and the staff of RPA for their commitment and support since my appointment as Chairman. I want to recognise also the input, support and funding from the National Transport Authority (NTA) which has been essential in successfully developing and implementing our projects.

Finally, and most importantly, I would like to acknowledge the continuing involvement and support of the Minister for Transport, Tourism and Sport, Leo Varadkar TD, Secretary General Tom O’Mahony and his officials. The Board and I thank them for their on-going assistance and support. RPA will continue to work with them to deliver improved public transport which meets the highest standards of performance, safety and value for the public.

Cormac O’RourkeChairman

23 April 2013

PassengeR numBeRs on luas ReaChed 29.3 million in 2012 – theiR highest eveR level. the Railway PRoCuRement agenCy (RPa) is delighted to see Continuing inCReases in PatRonage in what is an extRemely Challenging enviRonment FoR all seCtoRs oF the iRish eConomy. we will Continue to seek ways oF inCReasing PassengeR numBeRs FuRtheR.

ChaiRman’s statement

03RPA ANNUAL REPORT 2012

81,000aveRage daily PassengeRs

37.0kilometRes oF tRaCk

10million moRe JouRneys withluas CRoss City

29.3million tRiPs in 2012


Luas Infrastructure BusinessOverall demand for public transport in Dublin continued to be weak in 2012, due to fewer people in employment and reduced retail and leisure activity, all of which account for the majority of public transport trips. Despite the poor economic backdrop, the total passenger numbers on Luas reached a record high level of 29.3 million in 2012. These record numbers were achieved despite a week’s service on the Luas Red Line being lost due to a major fire adjacent to the line early in the year. This growth was partly due to 2012 being the first full year of operation on the Luas Citywest extension. However, passenger numbers in the second half of 2012 were higher than in the same period in 2011, when the Citywest extension was in service, showing real underlying growth.

RPA also responded to the continuing economic climate by introducing further cost control initiatives in conjunction with our operating partners Veolia Transdev. The combination of better than forecast passenger numbers and these cost saving measures resulted in an operating deficit of €3.4 million for the infrastructure business. Although this result represents an improvement on our forecast it is substantially the same as 2011, as the higher revenue and cost savings were offset by the additional

cost of operating the Luas Citywest extension. The cost savings initiatives introduced progressively throughout 2012 will have a greater impact on results for 2013. The 2012 deficit was funded through the business’s accumulated cash surpluses.

These results are encouraging for the long term. 2012 was the second year of RPA’s five year plan to return to break-even for the Luas infrastructure business. Luas passenger numbers are driven primarily by economic growth. Modest economic growth would see strong growth in Luas passenger numbers throughout the network.Based on current economic growth forecasts, we remain on target to achieve break-even by 2015.

RPA continued the Luas asset renewal programme in 2012. Life cycle asset renewal is vital in order to maintain the reliability and safety of the Luas system and trams. This programme will ensure that Luas retains its attractiveness to the travelling public.

The current Luas operating contract expires in 2014. In order to allow sufficient time to achieve a smooth transition, NTA as contracting entity and RPA as its agent, commenced the procurement for a new operating contract in December 2012,

RPa management Continued to addRess the Challenges PResented By the diFFiCult eConomiC enviRonment in 2012 in a ResPonsiBle and PRudent manneR, taking measuRes to ReduCe luas oPeRating Costs and ResPonding to ouR ongoing limited PRoJeCt mandate By FuRtheR ReduCing staFFing levels and exPendituRe in otheR aReas.

aCting ChieFexeCutive’sReview


by advertising for interested parties to submit applications for prequalification. Market consultation soundings taken earlier in the year indicate that there is strong market interest in the new contract.

RPA ProjectsThe year under review was an important year in terms of RPA’s plans for extending the light rail network. The granting of a railway order is a key milestone in the implementation of a light rail project. The railway order provides RPA with all of the powers needed to acquire land and construct a new line. An Bord Pleanála granted the Luas Broombridge railway order in August 2012. The granting of the railway order represents the culmination of many months and years of planning, consultation and design.

The project is now renamed Luas Cross City to better reflect its objectives of extending the Luas Green line into the city centre to link with the Red Line, and onwards to serve Phibsborough, Grangegorman and Cabra. Luas Cross City is the most important light rail project undertaken by RPA since the opening of the original Luas lines in 2004. There is considerable demand for cross city trips on both the Red and Green Lines. Luas Cross City will fulfil this need and form the backbone of what will be a true light rail

network for the city. This demand is generated over the entire Luas network and thus helps maximise the benefits of the previous investment in Luas.

The Luas Cross City project achieved a second key milestone in 2012 when the Minister for Transport, Tourism and Sport, having informed the Cabinet, announced that the project could proceed to construction. Significant progress was made with the design and procurement of the Luas Cross City project during the year and RPA expect to award contracts for early enabling works in the first half of 2013.

The implementation of the Metro North project was deferred following the Government’s comprehensive spending review in 2011. The minimum works necessary to allow the completion of the new adult hospital and the future development of a metro station at the Mater campus were successfully completed during the year. These works were essential in order to preserve the value of the investment to date in the Metro North scheme. Bus Rapid Transit (BRT) has emerged in recent years as an effective, cost efficient and high quality public transport system. At the request of NTA, RPA completed a feasibility study to investigate the


technical and economic feasibility of developing a BRT network in Dublin. This study concluded that a BRT system has the potential to draw significant demand from the private car and recommended further work on the development of two cross city corridors, which will be carried out in 2013.

Business DevelopmentThe Minister extended RPA’s mandate in May 2012 to allow us pursue commercial opportunities in offering advisory services in our areas of expertise, particularly in international markets. RPA secured two significant consultancy contracts during the year, advising on light rail projects in Norway and the Netherlands. This approach allows RPA to retain the core scarce skills needed to implement complex infrastructure projects during a period of low investment and provides a valuable source of income for RPA.

AcknowledgementsI would like to acknowledge the many people and organisations who contributed to the work of RPA in 2012.

Luas is operated and maintained by Veolia Transdev and its subcontractors Alstom, Dalkia and Scheidt & Bachmann. I would like to thank the management and staff of these organisations for their ongoing commitment to delivering a high quality, safe and cost effective public transport service for the people of Dublin.

The Luas Cross City project is being planned and implemented in close consultation with other key stakeholders. I would particularly like to thank the City Manager and staff in Dublin City Council and the management and staff in the NTA for the considerable time and effort they

aCting ChieF exeCutive’s ReviewContinued


have committed to the project to date and look forward to their continuing engagement to ensure the successful implementation of the project.

I would like to pay particular tribute to Mr. Frank Allen, whose term of office as Chief Executive of RPA ended in August 2012, having led RPA through a number of major successes since 2002, including the successful launch of the original Luas lines and the delivery of three major extensions.

Finally, I thank my colleagues in RPA who have faced the challenges of current economic difficulties with a continued high level of professionalism and dedication to their work.

Rory O’Connor Acting Chief Executive

23 April 2013


key aChievements in 2012

Financial performanceRPA are on schedule to achieve a 25% reduction in corporate expenditure between 2011 and 2014. Corporate expenditure includes all expenditure involved with the running of the Agency and which is not directly related to the development of new infrastructure.

Total payroll and pension costs were reduced to €15.1m from €22.0m in 2011. Average numbers of staff employed by the Agency reduced from 268 in 2011 to 199 in 2012.

Managing the Agency’s project related costs during the transition periods between projects presents a significant challenge. The design and construction skills and experience necessary to implement successful light rail projects are not easily available in the market place. Therefore RPA has engaged in consulting and secondment activities which allow the retention of staff with key skills and experience while offsetting their cost against earned income. Some of this income is from international engagements in Norway and the Netherlands and represents a real achievement for RPA in establishing new funding sources. The Agency continues to manage its accumulated cash reserves in a secure but effective manner with a total of €2.1m interest (2011 €3.1m) being earned on balances held during the year. This income will provide RPA and the NTA with options for funding project expenditure and the Luas infrastructure business.

CommeRCial oPeRations

Infrastructure BusinessLuas operated its first full calendar year of the extended network in 2012 following the completion of Luas Citywest in 2011. The Luas network now covers 37 km including Luas Docklands and Luas Cherrywood, compared to the original 24 km opened in 2004. Luas trams ran 4 million kilometres in 2012, compared to 2.1 million in the first full year of operation, in 2005. Luas also had its busiest year in terms of passengers with 29.3 million journeys made compared to 22.2 million in 2005.

During 2012 we commenced a program of asset renewals on the original tram fleet. The work will ensure that the trams continue to deliver the high standards of safety, reliability and comfort which passengers value so highly. This work will continue in 2013 when the life cycle asset renewal program will be extended to the fixed infrastructure including track and other assets.

The infrastructure business remained in deficit in 2012. The deficit from the Luas infrastructure business and associated assets (before tax credits and interest on reserves) was €3.4m (2011 €3.3m). This improved to €2.3m (2011 €2.1m) after crediting interest earned on the accumulated cash reserves of the infrastructure business and taking account of tax credits and deprecation on self funded assets. The deficit was funded from accumulated cash reserves. Despite reporting positive progress with cost restructuring and patronage growth initiatives in the infrastructure business, operating deficits are forecast to continue for several years. The RPA, assuming conservative levels of patronage growth

oPeRating and FinanCial Review

oPeRating Review

Luas Art Competition 2012

Kids go Free promotion 2012


and similar levels of cost inflation expect the business to begin generating surplus income from 2015.

Significant efforts were made in 2012 by RPA and Veolia Transdev (the Luas Operator) to bring costs and revenues into line. A revised timetable commenced in April 2012, tailored precisely to passenger demand which saw a reduction in some off-peak services designed to realise savings of €1.4m in a full year. Initiatives are being introduced in 2013 in order to grow patronage. For example, a “Kids go Free” weekend promotion early in the year, which may be extended and certain offers in Luas Park and Rides will be introduced. NTA as contracting entity and RPA as its agent are in the process of tendering for the next Operations Contract, to commence in September 2014. We hope to maintain the quality of Luas services for the next contract term for a competitive price.

Secondments and ConsultingIn pursuit of its key strategic objectives, which include cost restructuring and diversifying funding sources RPA has engaged in the provision of secondment and consultancy services to third parties as well as to other state agencies and Government departments. RPA has been very successful in diversifying its commercial activities within the allowed remit in order to generate new sources of income and retain key resources for implementing Luas Cross City. During 2012, extended and new consultancy engagements were secured in Norway and the Netherlands. RPA believes these commercial developments can add considerable value for their transport sector clients whilst earning valuable income for the Agency. During 2012 RPA earned €0.9m from these commercial activities.

Project Delivery, Approval and Funding RPA prepare a comprehensive business case for each proposed infrastructure project. The business case incorporates the project’s transport, financial and economic evaluations. It also includes the proposed strategies and plans for the procurement and financing of the project. The business case is provided to the NTA when seeking funding approval for a project. In securing funding for new projects, RPA’s objective is to minimise the contribution required from the Exchequer and to seek funding via development levy schemes and bilateral agreements from those who will benefit directly from the improved infrastructure.

Industry ContextDuring the year, Luas continued to deliver significant capacity into the public transport infrastructure of the Greater Dublin Area. The infrastructural capacity delivered through the extended Luas Red and Green Lines since their inception is approximately 19,760 peak hour public transport trips. The average number of passengers carried daily increased slightly from 80,000 in 2011 to 81,000 in 2012.

Legal and Regulatory EnvironmentThe Transport (Railway Infrastructure) Act 2001 (as amended) provides for the granting of a railway order to the party seeking to provide light rail or metro infrastructure and services. The statutory process requires RPA to prepare a detailed railway order application including a reference design, an Environmental Impact Statement and a Book of Reference to identify property interests. The application for an order is then made to An Bord Pleanála.


The Railway Safety Act 2005 established a Railway Safety Commission which provides for the approval of new railway infrastructure projects. In relation to the construction of railway projects, RPA complies with and requires our contractors to comply with the Safety, Health and Welfare at Work Act 2005 and related regulations issued by the Health and Safety Authority.

Business and Financial ObjectivesRPA has a well established and consistent strategy for realising our vision, which is to “Get people in Irish cities out of cars and on to rail”. This strategy is outlined in the rolling annual 5 year Corporate Business Plan 2012 to 2016, published in February 2012. The plan identifies three key strategic objectives to realise our vision.

– New Infrastructure Provision: Provide safe and sustainable new public transport infrastructure in accordance with the requirements of Government transport strategies and funding constraints.

– Luas Infrastructure Business: Grow passenger numbers by providing safe, sustainable, high quality and attractive services on the Luas network in an affordable manner.

– Organisational Change: Continue to deliver an organisation that is lean and develops innovative business opportunities that support the Government’s Public Service Reform Plan and the planned RPA and NRA merger.

This Plan includes five-year scorecards showing the current budget year and the subsequent four years. These scorecards balance key measurable business benefits from three perspectives of financial, shareholder and customer, and incorporate enterprise risk management. The Exchequer’s financial constraints and new investment priorities led in 2012 to a significant reduction in the number of proposed new transport projects. Additionally the Minister for Transport, Tourism and Sport announced his intention to merge RPA and NRA, consistent with Government policy. RPA has adapted its strategy to meet the new investment priorities and successfully complete the merger with NRA while continuing to provide sustainable transport infrastructure and procure high quality passenger services through commercial operators.

oPeRating and FinanCial ReviewContinued


saFety & enviRonment

Construction During 2012, RPA continued with a program of construction works to improve accessibility and safety along the Luas network. This program will provide new walking and cycling routes, new cycle facilities, improved signage, and improved collection and drop-off areas at Luas stops. Site investigation works continued on Luas Cross City (LCC) and future proofing works for the underground station for Metro North at the Mater Hospital were completed.

In accordance with statutory responsibilities RPA monitored all contractors to ensure that their duties under the Safety, Health and Welfare at Work Act 2005, the Safety Health and Welfare at Work (Construction) Regulations 2006, and all relevant legislation, Codes of Practice and Guidance were effectively discharged or observed.

The overall Lost Time Accident Frequency Rate (LTAFR) for all RPA construction activities undertaken in 2012 was Zero (2011: Zero). Although construction activity was lower in 2012 compared to previous years, the Zero LTAFR represents a positive achievement for all who were involved in the design and construction of the various projects.

Passenger ServicesA record total of 29.3m passenger journeys were completed in 2012, compared to 29.1m passenger journeys in 2011.

After adjusting for increases in the volume of activity the 2012 safety incident data is displaying an overall downward trend compared with data for the previous seven years. However, these improvements

are overshadowed by the one fatality during 2012 of a pedestrian due to contact with a tram.

The number of public disorder and vandalism incidents recorded has increased compared to previous years. Certain initiatives have been introduced to combat the problem of antisocial behaviour and to improve the security of Luas passengers.

RPA will continue to work with Veolia Transdev and its maintenance sub-contractors to ensure that the high level of safety performances already achieved in operation of the Luas Red and Green Lines is maintained or enhanced. This includes working collaboratively with key stakeholders and interested parties to achieve safe interaction with Luas.

EnvironmentRPA’s Environmental Policy sets out the organisation’s commitment to mitigating the environmental and heritage risks associated with the planning, design, construction and operational phases of light rail and BRT projects. The remit of the policy was expanded in 2012 to incorporate the organisation’s commitment to implementing sustainability initiatives to achieve reductions in energy consumption and waste generation across infrastructure delivery. A report on RPA’s sustainability performance during 2012 can be found at the following link;http://www.rpa.ie/Documents/Environment/Dublin_Light_Rail_Annual_Sustainability_Report_2012.pdf

During 2012 environmental and archaeological expertise and advice was provided to all RPA projects in particular to support the identification of significant constraints in relation to BRT and to support the development of the design and contract

oPeRating andFinanCial ReviewContinued


documentation for the Luas Cross City project. Compliance with legislation and environmental commitments was also monitored and assured for the construction phases of the Mater diaphragm wall and for various Minor Projects through regular site inspections and the management of environmental issues on site. For operational Luas lines, a comprehensive noise monitoring programme was carried out by RPA to ensure compliance with permitted noise levels. During 2012, RPA also prepared Strategic Noise Maps for the operational lines in order to comply with EU Directive 2002/49/EC.

SustainabilityThe Dublin Light Rail Sustainability Plan 2011-2015 sets out clear targets for the reduction of energy consumption and waste generation across all infrastructure, passenger service and corporate activities.

Summary of our actions and achievements under the sustainability plan; Since the plan’s inception RPA in partnership with Veolia Transdev and Alstom and Dalkia have significantly reduced energy consumption in corporate buildings and increased the energy efficiency of passenger services. During 2012 RPA’s infrastructure designers continued their efforts to incorporate more environmentally friendly materials and construction solutions into their designs for new infrastructure.

A number of energy assessments were made in 2012 which will open the door to new and exciting advances in 2013 such as installing LED lights in trams and reducing energy required for the heating and ventilating of trams. These initiatives have the potential to impact positively on the energy

consumption of Luas operations in the future.

During 2012, RPA made significant reductions in the amount of energy required to light, heat and cool the Agency’s offices and to power office equipment and machinery. The total reduction in energy consumption was in the order of 26%. When taken with the reduction achieved in 2011, the combined reduction in total energy usage since 2010 is 36%.

develoPment oF luas and metRo

Luas Cross City A major milestone in the development of the project was reached in August 2012 when An Bord Pleanála granted a railway order to RPA for the construction, operation and maintenance of the Luas Cross City Project (formerly known as Luas Broombridge). There was no application for judicial review sought by any party and the Order became enforceable on 28 September 2012.

This statutory approval paved the way for the completion of the updated detailed business case and its submission to NTA. In November 2012, following this submission, the Government made the decision to proceed with the implementation of the project. Tenders were immediately issued by RPA for the initial enabling works contract – the Heritage Works – along with the Building Conditions Surveys. Works will commence on-street in mid-2013.

Minor Projects25 Minor Projects were carried out during 2012. Minor Projects typically involve enhancing the safety and customer attractiveness of the Luas


infrastructure and trams. Many of the projects in 2012 related to improving access to Luas stops from adjoining residential areas as well as environmental improvement works.

Bus Rapid Transit At the request of NTA, work continued on developing the concept of a BRT for Dublin. This work is reflected in the publication of a document entitled “BRT Core Dublin Network” in October 2012. Work was also carried out on a selection of a preferred routing and on the production of a preliminary design for a BRT system from Blanchardstown to UCD and Clongriffin to Tallaght.

Metro NorthThe Metro North project has been deferred for consideration until 2015 in advance of the next Exchequer funded investment program. The project remains Government policy and RPA has worked with the NTA to secure the investment made to date and to protect and maximise income from all existing supplementary development schemes. RPA and NTA will continue to work with the Local Authorities to maintain existing supplementary development schemes to capture a portion of the increased value created by transport infrastructure investment.In the financial statements for 2012 RPA carried out an assessment of impairment to the value of Metro North expenditure. The assessment was based on a number of assumptions regarding

the future development of the project. No further impairment charge was required in the year. To the extent that assumptions used in the assessment may change in the future the impairment amount would change accordingly.

Integrated TicketingRPA continued to support NTA in the development of the Leap card system during 2012. This support role will conclude in early 2013 after which the development and operation of the Leap Card will be carried out by the NTA and their implementation and operating partners.

Risk ManagementA comprehensive risk management system is in place for the evaluation, prediction and management of risks that might expose the Agency to loss. The system supports the effective management of risk by RPA throughout all business activities. The system involves the identification, management and, where possible, the mitigation of significant risks.

oPeRating and FinanCial ReviewContinued


FinanCialReview

CaPital stRuCtuRe and

tReasuRy PoliCy

RPA’s treasury policies continued to be adopted successfully throughout 2012. The policies are compiled on a conservative basis and are reviewed periodically and amended as deemed necessary. The implementation of robust systems of internal control and the adoption of satisfactory treasury policies contributed to the achievement of the key objectives of RPA in 2012 including the value for money objective.

The availability of funding for infrastructural development continued on a more restricted basis in 2012 due to the economic downturn. RPA continued to focus its efforts on maximising the funding available while reducing its cost base to meet the more restricted programme of infrastructural works. RPA worked with the NTA and local authorities in the maintenance of the existing infrastructural development levy schemes and in the development of new schemes. Funding from the levy schemes is designed to capture some of the long term land / property development gains arising from the provision of the infrastructure. Work was carried out in 2012 to identify possible alternative sources of funding for

Luas Cross City. The main source of funding for RPA continues to be that provided by the Exchequer.

The continued close cooperation between RPA, the NTA and the Department of Transport, Tourism and Sport facilitated the Agency in achieving its funding objectives in 2012.

RPA held short term cash deposits at 31 December 2012 of €45.9m (2011: €65.8m). The cash deposits include accumulated surpluses from the infrastructure business, development levies, a maintenance provision and Exchequer funding. RPA had no borrowings at 31 December 2012. Interest of €2.1m (2011: €3.1m) was earned during 2012 from short term cash balances held. Interest charges of €0.2m (2011: €0.2m) arose during the year. Cash surpluses are only deposited with banking institutions with an appropriate credit standing or where deposits are covered by the Government’s eligible liabilities guarantee scheme.


BOARD MEMBERS

Ms. Jacqueline Cross Mr. Ciarán MacSamhráinMr. David O’ Connor Mr. Pearse O’ Hanrahan Mr. Cormac O’Rourke (Appointed 10 October 2012)Mr. Tom Wall (Chairman until warrant expired on 18 April 2012)Mr. Declan WalshMr. Frank Allen (Chief Executive until warrant expired on 05 August 2012)

The position of Chairman of RPA was vacant from 18 April 2012. Members elected and appointed a Chair for each subsequent Board Meeting in 2012

ACTINg ChIEF ExECuTIvE

Mr. Rory O’Connor (Appointed 07 August 2012)

SECRETARY

Mr. Fergal Ruane

BANkERS

ulster BankHead OfficeGeorges DockDublin 2

Bank of IrelandHead OfficeLower Baggot StreetDublin 2

SOLICITORS

Arthur CoxEarlsfort CentreEarlsfort TerraceDublin 2

AuDITORS

PricewaterhouseCoopersOne Spencer DockNorth Wall QuayDublin 1

agenCyinFoRmation


Jacqueline Cross Member

David O’Connor Member

Ciarán MacSamhráinMember

Cormac O’RourkeChairman

Declan WalshMember

Pearse O’hanrahan Member

BoaRdmemBeRs


Financial Statements for the Year Ended 31 December 2012The Members of the Railway Procurement Agency present their report and financial statements for the Agency for the year ended 31 December 2012.

Results for the YearThe Income and Expenditure Account for the year ended 31 December 2012 and the Balance Sheet at that date are set out on pages 26 and 28. The deficit on ordinary activities for the year before taxation amounted to €1.6m (2011: €0.3m).

Despite commencing a successful restructuring of operating costs in 2012, the Luas infrastructure business reported a deficit on ordinary activities for only the second time. Deposit interest income fell by €1.0m and income from other Luas assets by €0.2m. These income adjustments reflect pricing and demand changes in the banking and advertising markets in Ireland and were effectively managed by the Board to limit their effect on the results. We expect further downward pressure on the pricing of cash deposits in 2013.

2013 will bring an opportunity with the NTA to plan for further restructuring of our operating costs through the competition for the new Luas passenger services contract.

The Members are confident that strategies in place to grow patronage and reduce costs will result in the Luas infrastructure business returning to surplus in 2015.

Post Balance Sheet EventsThere have been no significant events since the year end that would result in adjustment to the financial statements or inclusion of a note to them.

Statement of Members’ Responsibilities in respect of the Financial StatementsThe Transport (Railway Infrastructure) Act 2001 requires the Members to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Agency and of the surplus or deficit of the Agency for that year. In preparing those financial statements, the Members are required to:

– Select suitable accounting policies and then apply them consistently;

– Make judgements and estimates that are reasonable and prudent; and

– Prepare the financial statements on a going-concern basis unless it is inappropriate to presume that the Agency will continue in business.

The Members confirm that they have complied with the above requirements in preparing the financial statements.

The Members are also responsible for safeguarding the assets of the Agency and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In addition, the Members are required to include in the Annual Report a statement on the system of internal financial control in accordance with the requirements of the Code of Practice for the Governance of State Bodies (2009).

memBeRs’ RePoRt


Books of AccountsThe Acting Chief Executive, under the direction of the Members, is responsible for ensuring that proper books and accounting records, as outlined in Section 19 of the Transport (Railway Infrastructure) Act 2001, are kept by the Agency. To achieve this, the Acting Chief Executive has put in place a professionally staffed finance function and an effective financial reporting and management information system. The books and accounting records are maintained at Parkgate Street, Dublin 8.

Functions of the AgencyRPA is an independent statutory body that was established under the Transport (Railway Infrastructure) Act 2001. The principal statutory functions of RPA under this founding legislation are the provision of light rail and metro infrastructure and the procurement of light rail and metro services. Since the commencement of the Dublin Transport Authority Act in 2008, RPA has exercised those functions under assignment from NTA. In September 2011, RPA’s powers were extended to enter into agreements with NTA to advance the development of one or more Bus Rapid Transit (BRT) systems for the NTA, which has been identified as an objective for Dublin in the draft NTA Strategy for Transport in the Greater Dublin Area.

Members and SecretaryThe present Members and Secretary are listed on page 16 and all, except as indicated, have served throughout the year.

Fees paid to Members during the year and their attendance at board meetings were as follows;

Member Fees2012€’000

Attendance at board meetings

[Of 12]

Jacqueline Cross* 13 8

Ciarán MacSamhráin 11 11

David O’ Connor Nil 11

Pearse O’ Hanrahan 13 12

Cormac O Rourke** Nil 3

Tom Wall** 6 3

Declan Walsh Nil 11

Frank Allen** Nil 7

*During 2012, Jacqueline Cross was absent for some of the meetings as she was on maternity leave. **Cormac O’ Rourke was appointed on 10 October 2012. Tom Wall’s warrant expired on 18 April 2012 and Frank Allen’s warrant expired on 05 August 2012.

In accordance with the Department of Public Expenditure and Reform Guidelines on the “one person, one salary” principle for public sector employees, no fees are paid to David O’ Connor or Declan Walsh. Cormac O’ Rourke waived his fees. Expenses paid to Members during the year amounted to €5,946 comprising travel, accommodation and meals.

Audit CommitteeThe Agency’s Audit Committee in 2012 was made up of Tom Wall (Chairman), Jacqueline Cross, Pearse O’ Hanrahan and Declan Walsh. Tom Wall resigned from the Audit Committee on 23 February 2012 and Declan Walsh was appointed on 23 February 2012. Pearse O’ Hanrahan was appointed as Chairman of the Audit Committee on 28 June 2012. The position of Chairman had been vacant from

Proposed Depot at Broadstone


memBeRs’ RePoRtContinued

23 February 2012 to 28 June 2012 and during that time the Audit Committee meetings were chaired by a Member nominated by the Committee at the respective meetings. The Audit Committee reports to the Members on all aspects of financial reporting and accounting policy and reviews the effectiveness of the Agency’s system of internal financial control. The Agency’s external auditors meet with the Committee to review the results of the annual audit of RPA’s financial statements. The members of the Committee availed of the opportunity to meet privately with the external auditors at this meeting.

Remuneration CommitteeThe Agency’s Remuneration Committee in 2012 comprised Tom Wall (Chairman), Pearse O’Hanrahan, Jacqueline Cross and Declan Walsh. Tom Wall’s term expired on 18 April 2012. Declan Walsh was appointed to the Remuneration Committee on 08 November 2012 and Jacqueline Cross was appointed as the Chairperson of the Committee on the same day. The Remuneration Committee is responsible for making policy recommendations to the Board on matters of remuneration of the Chief Executive and general remuneration matters in the Agency.

Responsibility for the System of Internal Financial ControlThe Members acknowledge their responsibility for ensuring that an effective system of internal financial control is maintained and operated in the Agency. Such a system can only provide reasonable and not absolute assurance that the assets of the Agency are safeguarded, transactions authorised and properly recorded and that material errors or irregularities are either prevented or detected in a timely period.

Corporate governance and ControlsThe Members have taken steps to ensure an appropriate control environment in the Agency by:

– Adopting clear and best-practice structures and procedures through which the business of the Members is conducted;

– Clearly defining management responsibilities and ensuring that appropriate resources and training are made available; and

– Establishing formal procedures for determining and reporting significant control failures and ensuring appropriate corrective action is taken in a reasonable timeframe.

The Members have established processes to identify and evaluate business risks through the establishment of a risk management system. This system operates at project, functional and enterprise levels. The essential elements of this system are as follows:

– Identification of the nature, extent and financial implications of risks facing the Agency;

– Assessment of the likelihood of identified risks occurring;

– Identification of suitable methods of risk management and mitigation;

– Allocation of responsibility of the management and mitigation of identified risks;

– Monitoring of progress and compliance with mitigation actions;

– Reviewing of the effectiveness of the operation of the risk management systems; and

– Regular reporting to Members on material issues arising.

System of Internal Financial ControlThe system of internal financial control in RPA incorporates quality management information and regular Board and management review within a structure that provides for appropriate separation of duties authorised delegation of authority and clear accountability. In particular it includes: – A comprehensive budgeting system with

an annual budget that is agreed and then reviewed monthly by the Board;

– Monthly review by the Board of management accounts which compare and explain financial performance against forecast and budget;

– Clearly defined procurement, treasury and capital investment control guidelines; and

– Formal project management procedures.

Monitoring the System of Internal Financial ControlThe Members and the Audit Committee monitor the effectiveness of the system of internal financial control throughout the year. This is done through the preparation and review of:

– Regular management accounts and project reports;

– Audit reports from the internal audit function; and – Reports from the external auditors.


The Members also regularly review the activities of the Agency with the Acting Chief Executive and other senior management.

RPA has an internal audit function, which operates in accordance with the framework set out in the Code of Practice for the Governance of State Bodies (2009). The internal audit function prepares a plan of work each year. This plan takes into account an analysis of the risks to which the Agency is exposed and is approved by the Audit Committee. The internal audit function submits an annual report to the Audit Committee which includes a summary of internal audit activity for the past year and the Internal Audit Manager’s opinion on the adequacy and effectiveness of the system of internal financial control in the Agency. This report is additional to regular reports provided to the Audit Committee by the internal audit function throughout the year.

Annual Review of ControlsWe can confirm that since our last report a review of the effectiveness of the system of internal financial control has been carried out and has been deemed to be satisfactory.

Legal and Regulatory Compliance The Agency complies with the Code of Practice for the Governance of State Bodies and other relevant codes of practice and guidelines published by Government for state bodies. RPA has processes in place to seek to ensure that the Agency complies with legal and regulatory obligations.

While not a company under the Companies Acts, but rather a statutory body corporate, RPA has sought to comply with the requirements of the Companies Acts 1963 to 2012 where applicable. RPA is subject to the Ethics in Public Office Acts 1995 and 2001 and has measures in place to ensure that all directors and office holders affected by the Acts comply with their obligations.

RPA had procedures in place in 2012 to comply with the Safety, Health and Welfare at Work Act, 2005 and the regulations made under the Act. RPA has teams dedicated to environmental management and to health and safety management matters in order to ensure compliance with law and best practice in these areas. RPA continues to comply with the Department of Transport Sectoral Plan for Accessible Transport published pursuant to the Disability Act 2005, including the construction at James Hospital Stop in 2012 of new dropped crossings with tactile paving, within public space areas to improve the pedestrian environment for visually impaired persons.

RPA was compliant with relevant employment law and guidelines, including national pay agreements in 2012.

The Members are fulfilling their responsibility to ensure compliance, in all material respects, with the provisions of the European Communities (Late Payments in Commercial Transactions) Regulations, 2002 (“The Regulations”).

AuditorsPricewaterhouseCoopers, Chartered Accountants, have expressed their willingness to continue in office.

On behalf of the Members

Cormac O’ RourkeChairman

Rory O’ Connor,Acting Chief Executive

23 April 2013

Artists impression of future tram alignment for Luas Cross City on O’Connell Street


BRT has emerged in recent years as an effective, cost efficient and high quality public transport system. RPA completed a feasibility study to investigate the technical and economic feasibility of developing a BRT network in Dublin. This study, carried out in conjunction with the NTA, concluded that a BRT system has the potential to draw significant demand from the private car and recommended further work on the development of two cross city corridors, which will be carried out in 2013.


indePendent auditoRs’ RePoRtto the ministeR foR tRansPoRt, touRism and sPoRt and

the agency’s membeRs

We have audited the financial statements of Railway Procurement Agency for the year ended 31 December 2012 which comprise the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the Reconciliation of Movements in Members’ Funds, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Respective responsibilities of membersand auditorsAs explained more fully in the Statement of Members’ Responsibilities set out on page 18, the members are responsible for the preparation of the financial statements giving a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the Minister for Transport, Tourism and Sport, and the Agency’s Members, as a body, in accordance with Section 19 of the Transport (Railway Infrastructure) Act, 2001 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Agency’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the members; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland of the state of the Agency’s affairs as at 31 December 2012 and of its deficit and cash flows for the year then ended.

Opinions on other matters – We have obtained all the information

and explanations which we consider necessary for the purposes of our audit.

– In our opinion proper books of account have been kept by the Agency.

– The financial statements are in agreement with the books of account.

– In our opinion the information given in the Members’ Report is consistent with the financial statements.

Matters on which we are required to report by exception We have nothing to report in respect of the following:

Under the Code of Practice for the Governance of State Bodies (“the Code”) we are required to report to you if the statement regarding the system of internal financial control required under the Code included in the Corporate Governance Statement does not reflect the Agency’s compliance with paragraph 13.1 (iii) of the Code or if it is not consistent with the information of which we are aware from our audit work on the financial statements.

PricewaterhouseCoopersChartered Accountants and Registered AuditorsDublin

26 April 2013

a. The maintenance and integrity of the Railway Procurement Agency’s website is the responsibility of the Members; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

b. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.


inCome andexPendituRe aCCount

For the year ended 31 December 2012

Note 2012

€’000 2011€’000

Operating deficit 2 (3,610) (3,353)

Interest payable and similar charges 6(a) (218) (174)

Other finance income 6(b) 93 135

Interest receivable 6(c) 2,135 3,134

Deficit on ordinary activities before taxation (1,600) (258)

Taxation on deficit on ordinary activities 9 (113) (440)

Retained deficit for the financial year (1,713) (698)

Approved by the Members on 23 April 2013


Rory O’ ConnorActing Chief Executive


statement oF totalReCognised gains and losses


Note 2012

€’000 2011€’000

Retained deficit for the year (1,713) (698)

Actuarial gain/(loss) recognised in retirement benefit scheme 22 26 (857)

Change in unrecognised surplus on retirement benefit scheme 22 (24) 621

Total recognised losses for the year (1,711) (934)


Members’

Funds

2012

€’000

Members’Funds2011€’000

Reserve

2012

€’000

Reserve 2011€’000

Retained deficit for the year (1,713) (698) - -

Other recognised gains/(losses) 2 (236) - -

Movement for the year (1,711) (934) - -

Transfer from Reserve 2,315 2,119 (2,315) (2,119)

Net Movement for the year 604 1,185 (2,315) (2,119)

At 1 January 4,169 2,984 20,069 22,188

At 31 December 4,773 4,169 17,754 20,069

ReConCiliation oFmovement in memBeRs’ Funds


ASSETS EMPLOYED Note 2012

€’0002011€’000

FIxED ASSETS

Tangible fixed assets 10 1,120,806 1,143,833

CuRRENT ASSETS

Debtors 11 8,357 16,550

Bank and cash deposits 12 45,937 66,132

54,294 82,682

Creditors (amounts falling due after one year) 13 (13,306) (18,534)

Net current assets 40,988 64,148

Provisions for liabilities and charges 16 (140,318) (177,797)

Creditors (amounts falling due after one year) 14 (34,409) (37,744)

Net assets excluding pension asset 987,067 992,440

Pension asset 22 805 725

Net assets including pension asset 987,872 993,165

FINANCED BY

Capital and reserves

Members’ funds 15 4,773 4,169

Reserve 15(a) 17,754 20,069

Grants 17 931,998 935,752

Other funding 18 33,347 33,175

Capital and reserves 987,872 993,165

BalanCe sheetat 31 deCemBeR 2012

Approved by the Members on 23 April 2013


Rory O’ ConnorActing Chief Executive


OPERATINg ACTIvITIES Note 2012

€’0002011€’000

Net cash outflow from operating activities 21(a) (17,104) (14,934)

RETuRNS ON INvESTMENTS AND SERvICINg OF FINANCE

Interest received 3,481 2,636

3,481 2,636

TAxATION

Corporation tax paid (436) (604)

CAPITAL CAShFLOWS

Payments to acquire tangible fixed assets (23,254) (39,386)

Development levies and contributions 333 1,114

Refunded Exchequer advances (14,038) -

Capital grants received 22,897 20,238

Net outflow from capital cashflows (14,062) (18,034)

Net cash outflow before financing (28,121) (30,936)

FINANCINg

Revenue grants received 8,250 8,700

Decrease in cash 21(b) (19,871) (22,236)

Cash Flow statementFoR the yeaR ended 31 deCemBeR 2012


notes to the FinanCial statementsFoR the yeaR ended 31 deCemBeR 2012

1. ACCOuNTINg POLICIES

A. Accounting ConventionThe financial statements have been prepared under the historical cost convention.

B. grants and Other FundingCapital Grants received and receivable for capital projects are retained in a grants account and amortised to the income and expenditure account as the related assets are depreciated. Grants are provided under the NTA Capital Funding Programme, the Exchequer funding for which is provided by the Department of Transport Tourism and Sport under their capital envelope for transport capital projects, i.e. Greater Dublin Area (GDA) capital programme.

“Other Funding” in the form of development levies and developer contributions received by the Agency and which (subject to the provisions of relevant agreements) are utilised to fund capital expenditure are retained in a development levies and developer contributions account and amortised to the income and expenditure account as the related assets are depreciated. Development levies are collected by Local Authorities under the relevant legislative provisions. Developer contributions arise through the conclusion of bilateral agreements with private individuals, companies or partnerships.

Grants provided by the Exchequer for the implementation of certain projects for which development levy schemes are adopted may subsequently be designated repayable in accordance with the terms of a project specific Ministerial Direction. Where such obligations exist estimates of the repayable amounts of any grants received are made based on the information available and the terms of the Ministerial Direction. The amount of grant income that has been received and is estimated to be repayable is retained as a long term liability. In arriving at the estimated amount, management must consider a number of risks and uncertainties including development risk, premature cessation of levy scheme, project completion risk and change of law.

Revenue grants are recognised in the income and expenditure account in the same period as the expenditure being funded. These grants are received from two sources;1. The “RPA Administrative and Expenses”

Programme from the Department of Transport, Tourism and Sport for corporate activities.

2. The NTA GDA Capital Funding Programme. These grants are approved on a project specific basis.

C. Tangible Fixed Assets and DepreciationAll expenditure on the acquisition of capital assets, or expenditure which significantly adds to the value, capacity in use, or useful economic life of existing assets, is capitalised as a fixed asset.

Where expenditure relates to the acquisition or creation of an asset that is not operational or in service at the balance sheet date then such expenditure is presented as “Assets under Construction” and is not depreciated.

Expenditure on the acquisition of property assets is capitalised as a fixed asset only when the property transaction has been fully completed. Expenditure incurred in respect of property assets prior to completion of the transaction is included in prepayments.

Interest payable on borrowings to finance capital assets is capitalised. Capitalisation of interest costs ceases when substantially all the activities that are necessary to get the asset ready for use are complete.

Luas infrastructure assets are depreciated as they enter revenue service and any grants received in respect of their purchase are amortised on the same basis. Other fixed assets are depreciated when they are brought into use.

Depreciation is calculated to write off the cost of tangible fixed assets on a straight-line basis over the estimated useful lives as follows:

Years

Luas fixed infrastructure 30 years

Luas rolling stock 15 years

Office fixtures and equipment 3-5 years

Enhancement to leasehold premises 10 years*

Motor vehicles 5 years

* Enhancements to leasehold premises are depreciated over 10 years, or over the remaining life of the lease, whichever is shorter.

D. CapitalisationExpenditure is capitalised in respect of transport infrastructure assets and passenger transport facilities under construction and development activity on Government approved capital projects. For the purposes of these policies, Government approval for light rail or metro projects has been


defined by reference to the date of submission of a railway order application except where agreement has been obtained from the Government to fund capital expenditure in advance of the receipt of a railway order. Expenditure on feasibility studies and preliminary design for potential but unapproved capital projects is written off to the income and expenditure account in the year of expenditure.

E. InsuranceThe Agency maintains insurance policies for damage and loss of owned/third party property and for its potential liabilities to employees and third parties.

F. Pensions – Defined Contribution SchemePension benefits are funded over the employees’ period of service by way of contributions to a defined contribution scheme. Contributions are charged to the income and expenditure account as they become payable.

g. Pensions – Defined Benefit SchemeThe Agency has provided for its obligations regarding staff pensions in accordance with the provisions of FRS 17 “Retirement benefits”.

Schemes in surplus are shown as assets on the balance sheet net of deferred tax impact. Schemes in deficit together with unfunded schemes are shown on the balance sheet as liabilities net of the deferred tax impact. Actuarial gains and losses are recognised immediately in the statement of total recognised gains and losses.

h. Taxation and Deferred TaxationCorporation tax payable is provided on taxable surpluses at the current rate.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at the balance sheet date that result in an obligation to pay more tax or a right to pay less tax in the future.

Timing differences are differences between the surplus or deficit as computed for taxation purposes and the surplus/deficit as stated in the financial statements, which arise because certain items of income and expenditure in the financial statements are dealt with in different periods for taxation purposes.

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will

be suitable taxable surpluses from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured at the tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on the tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred tax is measured on a non-discounted basis.

I. ReserveSurpluses generated on the Infrastructure Business are transferred to a Reserve. This reserve is required to fund future refurbishment of the Luas infrastructure and future operating deficits.

J. Provisions for Liabilities and ChargesProvisions for track restoration, legal and insurance claims and grants repayable are recognised when the Agency has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense.


notes to the FinanCial statementsFoR the yeaR ended 31 deCemBeR 2012 Continued

2. OPERATINg DEFICIT

The operating deficit has been arrived at after crediting (charging):

Note 2012 €’000

2011 €’000

Deficit on Luas infrastructure activities before interest, tax and depreciation 3 (3,441) (3,303)

Project development and agency corporate expenses 4 (10,288) (15,134)

Depreciation 10 (43,096) (43,983)

Asset Impairments - (30,058)

(56,825) (92,478)

Grants 5 51,963 87,980

Amortised levies and deferred credits 1,252 1,145

Operating deficit (3,610) (3,353)

3. DEFICIT ON LuAS INFRASTRuCTuRE ACTIvITIES

The deficit on Luas infrastructure activities is arrived at after crediting (charging):

2012 €’000

2011 €’000

Net deficit on provision of Luas infrastructure (5,007) (5,075)

Net surplus generated from Luas associated assets 2,200 2,416

Local authority rates (634) (644)

Deficit on Luas infrastructure activities before interest, tax and depreciation (3,441) (3,303)

Interest attributable to Luas infrastructure activities 938 1,043

Tax credit attributable to Luas infrastructure activities 200 141

Depreciation on self funded assets (12) -

Transferred from Reserves (2,315) (2,119)

The depreciation charge for the Luas infrastructure activities, which incorporates depreciation on self funded assets, was €42,843,000 (2011: €43,523,000) and is included in the total depreciation charge in note 2.

4. PROJECT DEvELOPMENT AND AgENCY CORPORATE ExPENSES

2012 €’000

2011 €’000

Project development and agency corporate expenses are split as follows:

Project development 2,984 6,046

Agency corporate expenses 8,206 9,144

Secondment/consultancy income (902) (56)

10,288 15,134

Depreciation of €253,000 (2011: €460,000) relates to agency corporate activities.

Project development costs include the costs of developing infrastructure projects prior to submission of a railway order application.


5. gRANTS - INCOME & ExPENDITuRE ACCOuNT

Grants represent revenue grants receivable for the year ended 31 December 2012 and capital grants amortised. Grants are received from the Exchequer.

Grants included in the income and expenditure account are as follows:

2012 €’000

2011 €’000

Revenue grants 10,131 15,084

Capital grants 41,832 42,838

Grants on Asset Impairments - 30,058

51,963 87,980

6. INTEREST AND OThER FINANCE ChARgES

A. Interest Payable and Similar Charges

2012 €’000

2011 €’000

Interest payable for the year (218) (174)

Included in the income and expenditure account (218) (174)

B. Other Finance Income/(Charge)

Under FRS 17 “Retirement benefits”, the net of the interest on the defined benefit scheme pension liabilities and the expected return on assets is income of €93,000 (2011: €135,000) and is recorded as finance income adjacent to interest (see note 22).

C. Interest Received and Receivable on Short Term Deposits

2012 €’000

2011 €’000

Interest received and receivable for the year 2,135 3,134

Included in the income and expenditure account 2,135 3,134



7. DEFICIT ON ORDINARY ACTIvITIES BEFORE TAxATION

The deficit on ordinary activities before taxation is stated after charging (crediting):

2012 €’000

2011 €’000

Depreciation 43,096 43,938

Auditors’ remuneration

- audit fee 90 90

- other assurance services 17 12

- tax advisory services 44 6

- other non-audit services 50 63

Grants (51,963) (87,980)

Amortisation of levies and deferred credits (1,252) (1,145)

Operating Lease Charges:

- plant & machinery 123 134

- office premises 640 3,743

Members’ remuneration excluding Chief Executive:

Fees 43 58

Salaries 110 109

Pension 11 11

Chief Executive’s remuneration:

Fees - 10

Salary 96 165

Pension 23 41

Other benefit 5 9

Acting Chief Executive’s remuneration*:

Salary 55 -

Pension 5 -

Other benefit 1 -

* From commencement as Acting Chief Executive on 07 August 2012


8. EMPLOYEES

The average number of persons employed by the Agency (including Members) during the year was as follows:

2012Number

2011Number

Corporate and project support services 90 102

Projects and infrastructure management 109 166

199 268

The staff costs comprise: 2012 €’000

2011 €’000

Wages and salaries 12,577 18,907

Social welfare costs 1,282 1,664

Pension costs 1,205 1,436

15,064 22,007

Deduct: staff costs capitalised in fixed assets (7,427) (12,287)

Included in the income and expenditure account 7,637 9,720



9. TAx ON DEFICIT ON ORDINARY ACTIvITIES

A. Analysis of Income and Expenditure Account Charge:

2012 €’000

2011 €’000

Current tax:

Deferred tax (credit)/charge for the year (323) 103

Corporation tax on deficit for the year 411 361

Adjustments in respect of previous years 25 (24)

Tax on deficit on ordinary activities (see Note 9B) 113 440

B. Reconciliation of the Expected Tax Charge at the Standard Rate to the Actual Tax Charge at the Effective Rate.

The tax assessed for the year is higher (2011: higher) than the standard rate of corporation tax in the Republic of Ireland of 12.5% (2011: 12.5%). The differences are explained below:

2012 €’000

2011 €’000

Deficit on ordinary activities before taxation (1,600) (258)

Deficit on ordinary activities multiplied by the standard rate of corporation tax in the Republic of Ireland of 12.5% (2011:12.5%)

(200) (32)

Other timing differences (2) (11)

Loss relief (257) -

Higher rates of tax on passive income 870 404

Adjustments to tax charge in respect of previous year 25 (24)

Current tax charge for year 436 337

C. Circumstances Affecting Current and Future Tax Charges, and Deferred Tax

The deferred tax credit of €0.3m consists of a charge of €0.01m on the pension asset and a credit of €0.3m relating to deferred tax on accrued deposit interest.


10. TANgIBLE FIxED ASSETS

Luas

Infrastructure

€000

Assets Under

Construction

€000

Rolling Stock

& Equipment

€000

Office

Fixtures &

Equipment

€000

Enhancement

to Leasehold

Premises

€000

Motor

Vehicles

€000

Total

€000

Cost

At 1 January 2012 1,087,639 94,605 184,000 3,254 647 246 1,370,391

Additions in year 1,741 16,116 2,109 103 - - 20,069

At 31 December 2012 1,089,380 110,721 186,109 3,357 647 246 1,390,460

AccumulatedDepreciation

At 1 January 2012 161,405 - 61,677 2,757 631 88 226,558

Depreciation charge 30,436 - 12,407 204 3 46 43,096

At 31 December 2012 191,841 - 74,084 2,961 634 134 269,654

Net Book valueAt 31 December 2011 926,234 94,605 122,323 497 16 158 1,143,833

At 31 December 2012 897,539 110,721 112,025 396 13 112 1,120,806

Aggregate interest payable of €3,361,000 has been capitalised as part of tangible fixed assets to date.



11. DEBTORS (AMOuNTS FALLINg DuE WIThIN ONE YEAR)

2012€’000

2011€’000

Prepayments and accrued income 4,723 7,617

Grants receivable 2,936 8,269

VAT receivable 483 664

Corporation tax 215 -

8,357 16,550

12. BANk AND CASh

2012 €’000

2011€’000

Bank and cash 45,937 66,132

45,937 66,132

13. CREDITORS (AMOuNTS FALLINg DuE WIThIN ONE YEAR)

2012 €’000

2011 €’000

Trade creditors and accruals 10,585 15,568

Grants received in advance 2,721 2,426

Corporation tax - 216

Bank overdraft - 324

13,306 18,534

14. CREDITORS (AMOuNTS FALLINg DuE AFTER ONE YEAR)

2012 €’000

2011 €’000

Trade creditors and accruals 34,409 37,744

34,409 37,744


15. MEMBERS’ FuNDS

2012 €’000

2011 €’000

At 1 January 4,169 2,984

Deficit retained for the year (1,713) (698)

Actuarial gain/(loss) recognised in retirement benefit scheme (Note 22) 26 (857)

(Increase)/decrease in unrecognised surplus on retirement benefit scheme (Note 22) (24) 621

Transfer from Reserve (Note 15a) 2,315 2,119

At 31 December 4,773 4,169

15A. RESERvE

2012 €’000

2011 €’000

At 1 January 20,069 22,188

Transfer to Members’ Funds (Note 15) (2,315) (2,119)

At 31 December 17,754 20,069

16. PROvISIONS FOR LIABILITIES AND ChARgES

Restructuring

€’000

Onerous Lease

€’000

DeferredTax

€’000

grantsRepayable

€’000

Insurance & Legal Claims

€’000

TrackRestoration

€’000

Total

€’000

At 1 January 781 3,155 - 167,750 238 5,873 177,797

Repayment in the year - - - (14,038) - - (14,038)

Notional interest - - - - - 217 217

Movement in year (781) (329) 187 (22,708) 88 (115) (23,658)

At 31 December - 2,826 187 131,004 326 5,975 140,318

The provisions have been made in accordance with the accounting policies as set out in Notes 1(b), 1(e) and 1(j) to these financial statements.

The Agency, through the holding of retentions and insurance bonds, has adequately provided for costs that may arise through contractual ‘non-performance’.

Grants repayable include grants provided by the Exchequer as advance funding for the implementation of certain projects for which development levy schemes are in place and have been deemed repayable in accordance with Accounting Policy Note 1(b).



17. gRANTS

2012€’000

2011€’000

At 1 January 935,752 978,627

Received and receivable 25,501 46,132

Transfer from/(to) provisions for liabilities and charges (Note 16) 22,708 (1,027)

Revenue grants released to income and expenditure account (10,131) (15,084)

Accelerated amortisation in relation to project impairments - (30,058)

Capital grants amortised (41,832) (42,838)

At 31 December 931,998 935,752

Grants provided by the Exchequer as advance funding for the implementation of certain projects for which development levy schemes are in place may be repayable in accordance with the terms of a project specific Ministerial Direction. Any grants considered repayable are moved to long term liabilities in accordance with Accounting Policy Note 1(b).

The annual grants received and accounted for under the NTA GDA Capital Funding Programme and RPA Administrative and Expenses Programme in 2012 were €22.90m and €8.25m respectively.

18. OThER FuNDINg

2012 €’000

2011 €’000

At 1 January 33,175 32,847

Development levies & developer contributions 333 389

Amortisation of levies (161) (61)

At 31 December 33,347 33,175

As outlined in Note 1(b), development levies and developer contributions received by the Agency are retained in a development levies and developer contributions account and amortised to the income and expenditure account as the related assets are depreciated.


19. CAPITAL COMMITMENTS

2012 €’000

2011 €’000

At the year end the following capital commitments authorised by Members had not been provided for in the financial statements:

Contracted but not provided for 8,627 19,051

Authorised but not contracted for 9,957 11,711

18,584 30,762

20. FINANCIAL COMMITMENTS

Land &Buildings

€’000

Other Operating

Leases €’000

At 31 December 2012, the company had annual commitments undernon-cancellable operating leases expiring as follows;

In one year or less - 11

In more than one year but not more than five years 578 71

In more than five years 775 -

At 31 December 2011, the company had annual commitments undernon-cancellable operating leases expiring as follows;

In one year or less - 47

In more than one year but not more than five years 578 63

In more than five years 775 -



21. CASh FLOW

A. Reconciliation of Operating Deficit to Net Cash Outflow from Operating Activities

2012 €’000

2011 €’000

Operating deficit (3,610) (3,353)

Depreciation 43,096 43,983

Amortisation of levies and deferred credits (312) (1,145)

Pension credit/(charge) – additional to operating surplus 95 (101)

Asset impairment - 30,058

Decrease/(increase) in debtors 2,623 (1,051)

Grants (51,963) (87,981)

(Decrease)/increase in creditors (6,059) 743

(Decrease)/increase in provision for liabilities and charges (974) 3,913

(17,104) (14,934)

B. Reconciliation of Net Cash Flow to Movement in Net Debt

2012 €’000

2011 €’000

Decrease in cash in the year (19,871) (22,236)

Net cash at beginning of year 65,808 88,044

Net cash at end of year 45,937 65,808

C. Analysis of Changes in Net Debt

At 1 Jan 2012€’000

Cash Flows€’000

At 31 Dec 2012€’000

Bank Overdraft (324) 324 -

Cash deposits 66,132 (20,195) 45,937

65,808 (19,871) 45,937


22. PENSION COMMITMENTS

The majority of Agency employees making contributions are members of a defined contribution scheme, details of which are provided below. The remainder of those employees who make pension contributions are members of RPA’s defined benefit scheme established by the Agency in 2003. Details of the defined benefit scheme are provided below.

Defined Contribution SchemeA defined contribution pension plan was set up in 2003 for the Agency staff who do not qualify for membership of the defined benefit scheme noted below. This plan does not give rise to any funding liability under FRS 17. The pension charge in respect of this plan is equal to the contributions payable by the Agency for the year, being €918,000 (2011: €1,205,000).

Defined Benefit SchemesIn order to comply with the provisions of section 24 and 25 of the Transport (Railway Infrastructure) Act, 2001 the Agency established a defined benefit scheme in 2003 to provide for pension entitlements of those employees transferring from the CIE 1951 defined benefit scheme. The new scheme was set up using the template model scheme for public sector pension arrangements as issued by the Department of Finance, modified as necessary in order to replicate the benefits provided under the CIE 1951 defined benefits pension scheme. Following extensive discussions with CIE, the principle of transferring payments for those members of the 1951 scheme who joined RPA since December 2001 has now been established. In accordance with a decision of the Board, the value of transfer payments are credited to the scheme in the Statement of Total Recognised Gains and Losses in the year they are received.

The defined benefit actuarial pension charge for the year was €136,000 (2011: €33,000), with €229,000 charged to operating deficit (2011: €168,000) and €93,000 receipted to other finance income (2011: €135,000). The contribution to RPA’s defined benefit scheme in the year was €226,000 (2011: €92,000).

At 31 December 2012 an independent professionally qualified actuary carried out a full valuation of the assets and liabilities of the RPA scheme. Those assets and liabilities were valued using the projected unit method.

A pension surplus of €805,000 considered to be recoverable over the life of the scheme has been reported in the balance sheet. The valuation of the surplus under FRS 17 rules indicated a technical surplus of €1,867,000, however the maximum amount of surplus that can be recognised on the balance sheet is limited to the value of an employer contribution holiday in perpetuity, measured using the FRS17 basis. Under these rules, only €920,000 is considered recoverable and as a result, the pension surplus has been reduced by €947,000 to limit the surplus to the estimated recoverable amount of €920,000. Deferred tax of €115,000 has been charged against the pension surplus.



22. PENSION COMMITMENTS (CONTINuED)

The amounts recognised in the balance sheet are as follows:

2012€’000

2011€’000

Present value of scheme liabilities (11,045) (9,385)

Fair value of scheme assets 12,912 11,136

Pension surplus 1,867 1,751

Unrecognised asset due to limit in paragraph 41 from FRS17 (947) (923)

Assets recognised on the Balance Sheet 920 828

Related deferred tax (115) (103)

Net pension surplus 805 725

The amounts recognised in the income and expenditure account are as follows;

2012€’000

2011€’000

Interest cost (448) (452)

Expected return on scheme assets 541 587

Other finance income 93 135

Current service cost – included in agency corporate expenses (229) (168)

(136) (33)

Actual return on plan assets 1,493 (138)

The amounts recognised in the Statement of Total Recognised gains and Losses are as follows:

2012€’000

2011€’000

Actual less expected return on scheme assets 952 (724)

Experience gains 800 549

Change in assumptions underlying the present value of the scheme liabilities (1,726) (682)

Actuarial gains/(losses) recognised in the statement of total recognised gains and losses 26 (857)

Change in unrecognised surplus on retirement benefit scheme (24) 621

Total gain/(loss) recognised in the statement of total recognised gains and losses 2 (236)



The cumulative actuarial loss recognised in the statement of total recognised gains and losses up to and including the financial year ended 31 December 2012 is €1,379,000 (31 December 2011: €1,353,000).Expected contributions for the year 31 December 2013 are €85,000.

Movement in Scheme Assets and Liabilities

SchemeAssets€’000

SchemeLiabilities

€’000

PensionSurplus

€’000

At 1 January 2011 11,123 (8,574) 2,549

Current service cost - (168) (168)

Interest on scheme liabilities - (452) (452)

Expected return on scheme assets 587 - 587

Actual less expected return on scheme assets (724) - (724)

Experience gain on liabilities - 549 549

Change in assumptions - (682) (682)

Contributions by scheme participants 82 (82) -

Employer contributions paid 92 - 92

Benefits paid (24) 24 -

At 31 December 2011 11,136 (9,385) 1,751

At 1 January 2012 11,136 (9,385) 1,751

Current service cost - (229) (229)

Interest on scheme liabilities - (448) (448)

Expected return on scheme assets 541 - 541

Actual less expected return on scheme assets 952 - 952

Experience gain on liabilities - 800 800

Change in assumptions - (1,726) (1,726)

Contributions by scheme participants 81 (81) -

Employer contributions paid 226 - 226

Benefits paid (24) 24 -

At 31 December 2012 12,912 (11,045) 1,867

All of the scheme liabilities above arise from a scheme that is wholly / partly funded.



Risks and rewards arising from the assets

At 31 December 2012 the scheme assets were invested in the Irish Life Consensus Fund, the Irish Life Cash Fund and State Street Global Advisors Ireland Limited (formerly Bank of Ireland Investment Manager) Scheme.

The fair value of the scheme assets as a percentage of total scheme assets and target allocations are set out below:

(as a percentage of total scheme assets) 2012%

2011%

Equities 48.8 47.2

Bonds 38.6 38.0

Other 12.6 14.8

Scheme assets do not include any of the Railway Procurement Agency’s own financial instruments, or any property occupied by the Railway Procurement Agency.

Basis of expected rate of return on scheme assets

The expected return on bonds is based on the yield on long term eurozone government bonds which at 31 December 2012 was 3.15% (2011: 4.2%).

For equities the long term rate of return is expected to exceed that of bonds by a margin, the “risk premium”. In assessing the equity risk premium, past returns have been analysed giving a risk premium of 3.0% above the long term eurozone government bond yields, giving an assumed return of 6.15% (2011: 7.2%).

The return on other scheme assets is expected at 1.1% (2011: 2.4%) which assumes a weighted return for cash of 0.5% (2011: 0.75%) and property 4.9% (2011: 6.3%). Thus, the overall expected return on scheme assets at 31 December 2012 is 4.4% (2011: 5.35%).

The principal actuarial assumptions at the balance sheet date:

(as a percentage of total scheme assets) 2012%

2011%

2010%

Discount rate at 31 December 3.50 4.70 5.20

Future salary increases 4.25 4.25 4.25

Future pension increases 3.25 3.25 3.25

Inflation rate 2.25 2.25 2.25

Assumptions regarding future mortality are set based on advice from published statistics and experience.

The mortality assumptions are based on standard mortality tables which allow for future mortality improvement in the assumptions.

There is one current pensioner in the scheme.




Longevity for members retiring at 60.

2012Years

2011Years

Male 26.3 26.2

Female 28.1 28.0

The history of Experience gains and Losses has been:

2012 2011 2010 2009 2008

Present value of the scheme liabilities Amount (€’000). (11,045) (9,385) (8,574) (9,928) (8,523)

Fair value of scheme assetsAmount (€’000). 12,912 11,136 11,123 10,120 6,862

1,867 1,751 2,549 192 (1,661)

Unrecognised surplus on retirementbenefit schemeAmount (€’000). (947) (923) (1,544) - -

Pension surplus/(deficit) Amount (€’000). 920 828 1,005 192 (1,661)

Experience adjustments on scheme liabilitiesAmount (€’000). 800 549 296 504 (33)

As a percentage of scheme liabilities at the balance sheet date (%). 7.2 5.8 3.5 5.1 (0.4)

Experience adjustment on scheme assets Amount (€’000). 952 (724) 347 739 (3,016)

As a percentage of scheme assets at thebalance sheet date (%). 7.4 (6.5) 3.1 7.3 (44.0)

Total amount recognised in statementof total recognised gains and lossesAmount (€’000). 2 (236) 927 34 (838)

Percentage of the present value ofscheme liabilities (%). 0.0 (2.5) 10.8 0.3 (9.8)



23. LITIgATION AND CLAIMS

The Agency, from time to time, is party to various legal proceedings. It is the opinion of the Members that losses, if any, arising in connection with these matters will not be materially in excess of provisions made in the financial statements.

In addition, the Agency, from time to time, also receives claims for compensation from parties with whom it is engaged in property negotiations and transactions. As outlined in Note 1(c), property related transactions are only included in the financial statements of the Agency when the transactions have been fully completed. Accordingly, no provision has been made in these financial statements for the estimated cost of settling property related claims. The final cost of settling these claims will be met out of the overall budget.

Note 16 to these financial statements gives details of the provision made in respect of insurance and legal claims at 31 December 2012.

24. RELATED PARTY TRANSACTIONS

In the normal course of business the Agency transacts business with entities controlled by the Irish Government. The total value of business transacted was €12.0m in the year ended 31 December 2012(2011: €8.0m). At year end, RPA had €45.7m of deposit balances with AIB.

25. COMPARATIvE FIguRES

Certain comparative figures have been restated to accord with their treatment in the current year.

RPA ANNUAL REPORT 2012

Railway Procurement agencyParkgate business centreParkgate streetdublin 8

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