JOINT COMMITTEE ON TRANSPORT debate -
Tuesday, 4 Mar 2003

Vol. 1 No. 5

Roads Service: Presentation.

Chairman

I welcome Dr. Malcolm McKibben, chief executive of the Roads Service of Northern Ireland, and Mr. David Orr, director of operations of the Roads Service, and, from the National Roads Authority, Mr. Michael Tobin, chief executive, Mr. Eugene O'Connor, head of project management, and Mr. Michael Egan, head of corporate affairs. I thank you all for attending and, in particular, recognise the presence of the Northern officials and acknowledge the assistance given to this committee by Ms Angela Smith MP, Under-Secretary of State for Northern Ireland. I hope this is the first of many visits of similar bodies to committees of the Oireachtas.

Before we start, I draw attention to the fact that while members of the committee have absolute privilege, this same privilege does not apply to witnesses appearing before it. Members are also reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make that official identifiable.

Dr. Malcolm McKibben

Thank you. I appreciate the chance to be here today to explain the responsibilities and activities of the Roads Service, the policy context in which it operates and its plans for upgrading cross-Border roads. I will start with a brief overview of the responsibilities and activities undertaken by the Roads Service as they are different from those of the NRA.

The Roads Service is an agency of the Department for Regional Development, one of 11 Departments created at the time of devolution in 1999. The devolved Administration is currently suspended and we are again operating under direct rule. The Minister who responded to the committee's invitation, Ms Angela Smith MP, is a new Minister but, although there has been a recent change in Minister, there has not been a recent change in the Department's aim, which is to improve the quality of life for everyone in Northern Ireland by maintaining and enhancing a range of essential infrastructural services and shaping the region's long-term strategic development.

The Roads Service contributes to that aim and its main functions are to ensure that the public road network is well maintained and managed, the network is developed to improve road safety and traffic management and measures are taken to implement Northern Ireland's regional transportation strategy for the period 2002-12. This strategy is better known as the RTS and guides what will be done in regard to transportation in Northern Ireland for the next decade.

The Northern Ireland Roads Service is the sole roads authority and this is where it mainly differs from the NRA which is responsible only for the national roads network. The Roads Service is responsible for almost 25,000 kilometres of road, of which about 60% are unclassified roads. It is also responsible for maintaining about 8,000 kilometres of footway, 6,000 bridges that range from 1.8 metres wide to the Foyle bridge which has a span of about 239 metres, 367 public car parks that have over 30,000 spaces and the management of on-street parking. It looks after 630 sets of traffic signals and pelican crossings and a state-of-the-art traffic information and control centre that helps to manage traffic flows and provide travellers with information that makes it easier to undertake journeys. It is responsible for maintaining nearly 250,000 street lights.

That is a broad indication of the responsibilities of the Roads Service. I will highlight a few key activities that may be relevant to the work of this committee. The top priority is the structural maintenance of the road network which is valued at nearly £19 billion. This includes maintaining both major and minor roads leading to and from the Border. The vast majority of the 300,000 annual road defects are on minor roads and, unfortunately, we have to fix one defect about every two minutes, 24 hours a day, 365 days a year.

Improvement of the road network is a key activity for us, whether through the provision of bypasses, dual carriageways or bridge strengthening or widening. We currently have a programme of schemes on the ground worth approximately £50 million. Although this is a relatively large programme for us, it pales into insignificance compared to the size of the road building programme currently going on in the Republic.

Road safety is an important issue for us all and we direct a considerable amount of our expenditure to improve safety, including our accident remedial programme, which aims to reduce the number of collisions at sites where accidents frequently occur. Since the early 1980s, we have spent approximately £14 million on such schemes at about 780 sites, saving approximately 2,600 accidents. Therefore, it is an important programme in road safety terms.

Both the NRA and the Roads Service are involved in the European initiatives, STREETWISE and INSTANT. The aim of STREETWISE is to deliver seamless, reliable and accessible travel information services of a consistent quality of common standards to road service users travelling in and between countries on the trans-European network. INSTANT is a traffic management and information initiative for North-South traffic. A recent feasibility study focused on the A1-N1 corridor.

We undertake a range of other activities which I do not intend to deal with. These include winter maintenance, traffic calming, providing and maintaining traffic signals and signage, routine maintenance such as gully emptying, grass-cutting etc. and co-ordination of the work of utilities, or at least attempted co-ordination. We are also a major consultee for planning applications. This will give members of the committee an idea of the responsibilities and activities involved. The Roads Service Agency has approximately 2,240 staff, who help us carry out our duties. Our budget will be between £200 million and £250 million per annum over the next two or three years.

The policy context in which we operate is important as it provides clear guidance on how to go about constructing our strategic roads programme. Shaping our future is our sustainable planning strategy for the future development of Northern Ireland up to 2025. Having it in place helps us to optimise the integration between transportation and land use planning. We, therefore, developed a regional transportation strategy which supports the land planning strategy and provides a framework - it is an important framework for us - for the future planning, potential funding and delivery of transportation over the next decade. As Chief Executive of the Roads Service, it gives me a very clear strategic direction on our activities for a long period.

The regional transportation strategy identified a need for approximately £3.5 billion to be spent on transportation over the next ten years. This is £1.37 billion over recent expenditure levels extrapolated through time. Fortunately, our recent budget has increased funding, particularly in support of major capital roads projects, road maintenance and local transportation and safety schemes. The next slide gives an indication of our recent allocations. The key point on which to focus is that from 2000 onwards we have been getting increased allocations year-on-year and we are optimistic that this trend will continue - it must continue if we are to make a significant difference to our strategic roads network.

We must implement our transportation strategy through three transport plans, which will be much more detailed than the strategy. There is the Belfast metropolitan transport plan, the sub-regional plan, which includes the rest of Northern Ireland's transport plan and, most relevant to this committee, the regional strategic transportation network, which is our upper road hierarchy. Mr. Orr will shortly give the details of the scheme on the main cross-Border routes which we anticipate will be carried out in the foreseeable future. I welcome the opportunity to hear the committee's views on the roads we intend to upgrade on that network.

The network is as follows. It consists of five key transportation corridors, which are shown in blue on the map. We call them link corridors, shown in green, and the remainder of the trunk road network. We will focus our capital works budget on this network because it is 1,230 kilometres long, or just less than 5% of our network, and it carries more than one third of our traffic. Therefore, it is a key issue in terms of improving economic prosperity in Northern Ireland.

Before I ask Mr. Orr to give the committee details of the upgrading of the RSTN, I would like to say a few words about co-operation. This is one of the reasons we are here today. We in the Roads Service believe that the co-operation between ourselves and the NRA has been excellent and to the mutual practical benefit of both agencies. The main mechanism we use as a formal cross-Border steering group, which meets quarterly with the top management of both organisations, is we consider strategic issues and review and co-ordinate work on joint projects, including the new Dundalk road or Aghalane Bridge. We also exchange information which is important. We look after local roads and, at divisional level, liaise with our divisional road managers in Donegal, Cavan, Monaghan, Leitrim and Louth County Councils. This has been excellent in improving each other's understanding of what we are doing and getting good synergy between the strategic approach adopted in both jurisdictions.

That is as far as I would like to go. Mr. Orr will now take us through some of the practical projects we are trying to advance in Northern Ireland.

Mr. David Orr

It is a great delight to be invited to address the committee. I would like to give members a flavour of some of the major work schemes that will be of interest in the cross-Border context. Before doing so, I should explain the three programmes in terms of timescale.

The construction programme is straightforward. It relates to schemes that are on site or contractually committed. The preparation pool consists of high priority schemes that are being taken through our statutory procedures. We have three statutory procedures in the North, including environmental assessment, the planning procedure and the vesting procedure. These are three separate procedures which can be time consuming. Therefore, the schemes in the preparation pool are likely to start on site, subject to the outcome of these procedures, within the next five years or so and depending on funding being available.

The forward planning schedule includes schemes that will be carried out over a ten year period. That is currently being reviewed in the context of the regional strategic transportation plan which will be finalised later this year. We welcome the opportunity to consult the committee about the cross-Border elements of the plan. The schemes for the forward planning schedule are assessed according to the five national criteria, the economy, accessibility, environment, integration and safety. We will be pleased to answer questions later on any of these issues.

Dr. McKibben referred to the key transport corridor. I will deal with issues that have a cross-Border context, beginning with the eastern seaboard corridor. This is a corridor which our Government has identified as being a priority for funding. It is shown in pink, going from Larne through Belfast, Newry and on through Dundalk to Dublin. What schemes are in prospect on that corridor? First, between Belfast and Larne there is a £12.4 million package on site, extending the dual carriageway and providing climbing lanes on the important route to the ferry port. The most significant scheme in prospect in Northern Ireland is the M1-Westlink widening scheme. Westlink joins the M1 and M2 motorways as they pass through Belfast. This is currently in the preparation pool. It is well advanced through the statutory procedures and the details are included in the hand-out. We hope to commence the scheme on the ground early in 2006.

The A1 dual carriageway from Belfast south towards Newry was built in the 1970s and 1980s. Parts of it need to be upgraded to modern standards and, therefore, we are going back on that route, introducing safety schemes such as a £5 million fly-over at Banbridge and a £4 million underpass at Dromore, which is in the preparation pool. There will be further schemes to come.

The A1 dual carriageway, as members will know, stops at Loughbrickland. We have plans at various stages of development to upgrade that to a high standard dual carriageway. The first scheme is the A1 from Loughbrickland to Beechill. This is a £13 million scheme and the statutory procedures for it should be complete later this year. We hope to make a start on this next year, subject to clearing those procedures.

The next major scheme in the package is to provide a high standard dual carriageway from Beechill to Cloghogue. This will run for 11 kilometres and will cost £50 million. This scheme was moved into the preparation pool by the former Minister, Mr. Peter Robinson, on the day the Assembly was suspended in October. We have made good progress and we are now at the option appraisal stage, with an exhibition in Newry last week.

The final scheme is a cross-Border project with our good friends in the National Roads Authority and Louth County Council. This is a 14.3 kilometre high standard dual carriageway from Cloghogue, just south of Newry, to Dundalk. The total cost of this scheme, North and South, is £70 million. There is very good co-operation with the National Roads Authority and Louth County Council. Mr. Eugene O'Connor and I are joint chairs of the project board. That is currently going through the statutory procedures and we hope to make a start on it as soon as possible. That is the eastern seaboard corridor. I assure the committee that Dr. McKibben and I have a personal ambition to complete the dual carriageway between Belfast and the Border early in 2008, that is within the next five years or so. Most of our efforts on major works are directed to that end.

The north-western corridor is very important for Donegal as it goes through Londonderry-Derry and down to Belfast. It also gives access to Derry City Airport, Belfast International Airport and the ferry ports. I hope this is of interest to the committee. The schemes include the Skeoge link, from the Buncrana Road near the Border to the Foyle Bridge. That has just cleared the statutory procedures and will go to tender in the next financial year - our financial year starts in April so that will be the 2003-04 financial year. We then have the Crescent link dualling, to the east of Derry, which is being considered for the forward planning schedule. We have been upgrading the A6 route between Derry and Belfast with a number of 2+1 overtaking sections. These are illustrated in a photograph and consist of two lanes going up-hill and one lane going down. They are placed on sections where the traffic volumes do not justify a full dual carriageway. We completed a couple of those at Burntollet last year and we will be starting another one in the next few weeks at Glenshane. The Dungiven bypass is being considered for the forward planning schedule.

Perhaps our most significant scheme is on site at Toome. The Toome bypass is a 3.5 kilometre dual carriageway, going around a very significant bottleneck on the route to Derry. That is an £18.2 million scheme. I hope that will be completed in March 2004. A recent scheme brought into the preparation pool is a dualling on either side of the Toome bypass linking the M22 to Castledawson bypass. That is the north-western corridor.

The western corridor, which is also of interest to Donegal and Derry, goes through Strabane, Omagh, Ballygawley and on to Monaghan and Dublin via the N2. We have been undertaking bypass schemes on this route and the Strabane bypass is on site at the moment. That will be completed in June of this year. We have just completed the Newtownstewart bypass, which takes about five minutes off the A5 route and is being greatly welcomed by people in the west of the province. The Omagh through-pass is at the vesting stage and, depending on progress during that stage, I hope to get it on site later in 2003 but definitely in 2004. That will depend on the statutory process. On the western corridor we will also be providing some 2+1 overtaking sections. The route from Ballygawley to Aughnacloy is being considered for upgrading by realigning the single carriageway.

The final corridor I wish to take the committee through is the south-western corridor. This runs from Belfast, through Dungannon, Enniskillen, Belcoo, Blacklion and on to Sligo. Once one leaves the M1 at Dungannon there are schemes to provide overtaking opportunities at Eglish and Cabragh. They will be undertaken in the not too distant future. They are currently in the statutory procedures stage but I hope to get them started in the next financial year. We are considering in our forward planning schedule the whole section from Dungannon to Ballygawley for dual carriageway. If that is brought into the forward planning schedule it will be a medium to long-term scheme. To the west of Ballygawley considerable realignment of the single carriageway is required. On this section we hope to provide some of the 2+1 overtaking sections. That is the south-western corridor.

That finishes our presentation, Chairman. We remind ourselves that all our work on these major schemes is based on the regional transport strategy, which aims to give a modern, sustainable and safe transport system for Northern Ireland and, in today's context, beyond. Thank you very much for your attention.

Mr. Michael Tobin

I welcome this opportunity to address the committee and to apprise members of the current status of the national roads programme. The authority's activities have been the focus of considerable attention recently in the media and elsewhere. In particular, attention has focused on our management of the programme and cost control issues.

Our management performance was the subject of a recent comprehensive report entitled Evaluation of Investment in the Road Network, prepared by consultants, Fitzpatricks Associates, on behalf of the NDP-CSF evaluation unit of the Department of Finance. It would be informative to quote from the conclusions of this report which state:

The 2000-06 national roads programme represents a historic increase in the level of infrastructural investment. Getting this programme up and running and operating effectively on the ground has been a major achievement in Irish public administration terms. The contribution of the relevant Departments, the National Roads Authority, the local authorities and the construction industry must be acknowledged.

The NRA has a strong project management focus, and this emphasis was derived from an earlier consultancy report on its management and procedures.

Factors which are in the direct control of the NRA would appear to be largely well managed, and most difficulties have arisen from external factors and difficulties in managing these.

In the case of programme expenditure, the comments suggest that the authority has overspent by a substantial amount, possibly more than €6 billion if some commentators are to be believed. The reality is significantly different. In the course of the first three years of the current national development plan, the authority's expenditure on the national roads programme totalled €2.75 billion. We are satisfied, and hope the committee and the public are satisfied, that this has been used to good effect and that the authority has sought value for money while operating within the framework of legislation, agreements and the form of contract prescribed for use on national road schemes by the Government contracts committee.

It might be noted that the Fitzpatrick report, already mentioned, concluded that cost control procedures appear adequate at the level of individual projects and in respect of matters within the direct control of the authority's project managers. However, it went on to say that the cumulative effects of external factors, including construction inflation, increased scope of projects and unanticipated physical and construction difficulties mean overall programme costs are now far in excess of initial estimates.

The authority is acutely conscious of the need to maximise value for money and will continue to review its practices and procedures in this regard. We have taken a range of measures to moderate cost increases within the authority's area of direct control and influence. These include the appointment of a cost estimation specialist who reviews all scheme estimates, the publication of a new specification for road works and a design manual for roads and bridges for the purpose of establishing design and construction standards, greater use of design and build contracts, which offer greater certainty of outturn cost, the adoption of revised road cross-section layout offering cost savings, standardised design for high cost items such as bridges and other structures, securing greater interest by foreign contractors, thereby stimulating more competitive tendering, PV clause and risk buy-out, where this gives good value to the authority, and giving further attention to improving the quality of site investigations.

Another source of recent interest concerns are what are referred to as cost overruns on individual road schemes. There is usually an implication that the authority is failing in its duty to contain costs. Again, the reality is significantly different as evidenced by the conclusions of the Fitzpatrick report and as illustrated by an awareness of the contractual arrangements within which the authority is obliged to operate. The standard form of contract for public civil engineering works, including national road schemes, as prescribed by the Government contracts committee, is the Institution of Engineers of Ireland Conditions of Contract, Third Edition. Unilateral deviations from the prescribed form are prohibited by the Department of Finance. This form of contract sets out the rules of engagement and identifies the risks to be borne by either party. The principle that the party best able to manage the risk should carry the risk is usually adopted. Typically the major risks inherent in a road construction contract would include unforeseen ground conditions; exceptional weather conditions; changes in quantities of work to be done, omissions and additions; design changes risks associated with statutory undertakers and archaeology; changes in legislation and price fluctuation.

All these elements can have a significant effect on the final price of a road scheme. For example, if in the course of the work the contractor encounters more extensive unsuitable ground conditions than had been envisaged when the bill of quantities for the scheme was prepared he is entitled, under the prescribed form of contract, to be paid for the additional material required to replace poor material. Similarly, additional costs are allowable under the price variation clause to reflect movements in prices generally. These can be significant, particularly as periods of up to three years or more can be involved in completing road contracts.

If contractors had to price for all the risk items already mentioned, tender prices would be higher. A contractor who fails to price for these risks would face severe financial losses should the risks materialise. Hence, in conventional remeasurement contracts for public civil engineering works, mechanisms are built into the contract to allow for adjustments when these risks are encountered. Inherent in such contracts is the probability of tender prices increasing as some of the risks materialise.

Typically, the overrun on traditional remeasurement contracts would amount to 25% to 30% with inflation in recent years adding up to 20% to a typical project. In recent years and against this background, the authority has pioneered a move in the direction of design and build contracts as an alternative method of procurement. Potential advantages include improved efficiency by giving contractors influence over the ability to build, greater certainty of outturn costs by passing more risk to contractors and a less adversarial contract with more emphasis on partnering and co-operation in construction.

We have been encouraged by our experience in piloting the design and build approach and the authority is now in the process of adopting this form of contract on a more general basis. We are assisting the work of the sub-group of the Cabinet sub-committee on infrastructure and housing currently investigating programme cost issues, including procurement and form of contract issues. We are also co-operating actively with the Office of the Comptroller and Auditor General which is examining the area of programme costs, cost estimation and control arrangements. We look forward to the findings of this work and will have regard to them in our ongoing efforts to strengthen management practices.

The authority is greatly encouraged by the value for money aspect of the Kilcock-Kinnegad PPP contract which will shortly be concluded. This augurs well for three other PPP schemes which are currently at tender stage; the M1 Dundalk western bypass, the N8 Fermoy bypass and the N25 Waterford city bypass. We are currently awaiting An Bord Pleanála's decision following the oral hearing into the Clonee-Kells scheme. Work is progressing well on preparing statutory documentation for the other schemes in our PPP programme.

PPPs will play an important role in the accelerated delivery of road infrastructure by harnessing the skills and finances of the private sector. The national roads investment programme outlined in the NDP sets a target for the NRA to secure €1.27 billion of private finance, through public private partnerships, towards overall planned national roads investment. The strategy being pursued by the authority envisages that such private investment will be repaid from tolls supplemented, as appropriate, by an Exchequer subsidy in the case of particularly large and costly road schemes. The authority must ensure that PPP projects are implemented successfully as they are integral to the delivery of the targets set for improvement of the national road network.

The authority recently announced details of allocations to local authorities for 2003 based on the record Exchequer provision of €1.263 billion, an increase of 11.4% on the expenditure outturn in 2002. This level of funding represents a major boost for the construction industry with the planned commencement of at least seven national road schemes this year. The schemes, which have a combined estimated cost of €1.138 billion, are the N1 Dundalk western bypass, the N2 Carrickmacross bypass, the N4 Kilcock-Kinnegad bypass, the M7 Monasterevin bypass, the N7 Naas Road, Kingswood interchange, the N8 Cashel bypass and the N25 Waterford city bypass. The number of schemes proceeding to construction may increase further depending on the overall rate of progress of the roads programme and financial commitments arising during the year. Priority schemes in this regard are the N4 Boyle-Carrick-on-Shannon and the N26 Ballina-Bohola, phase 1, schemes. The tender process for these two schemes is to commence immediately.

The authority has determined scheme allocations taking account of the policy objectives of the National Development Plan, 2000-2006, and the Minister for Transport's request to prioritise schemes on the major inter-urban routes, PPP schemes and schemes in the BMW region. The current imbalance in expenditure in favour of the southern and eastern region largely reflects the scheme content of the roads programme on publication of the national development plan in November 1999 and the time required to advance schemes through planning and statutory approval procedures. The authority is actively taking steps to redress the situation and these efforts are now producing results through the advancement of BMW region schemes such as the NI Dundalk western bypass, the N2 Carrickmacross bypass, the N4 Boyle-Carrick-on-Shannon, the M4 Kilcock-Kinnegad, the M7 Monasterevin bypass and the N26 Ballina-Bohola schemes.

This year's allocations make significant provision for property acquisition payments in respect of schemes which have already secured the necessary statutory approvals. Funding is also being made available for advance archaeological work on schemes such as the N18 Ennis bypass and the N4 Sligo inner relief road. The archaeological aspects of these schemes will be resolved in accordance with best practice, clearing theway for tendering for road construction to proceed.

In total, almost €150 million is being allocated for projects at planning and design stage. This will make it possible to make statutory orders and complete environmental impact statements for schemes, as well as advancing other schemes through various stages of planning. Planning and design work for major schemes on national secondary routes, including compensation payments for land for schemes which have obtained compulsory purchase order approvals, will benefit from a provision of €12.44 million.

The authority plans to spend €69 million this year on road pavement improvements. This work is intended to maintain the road network in good structural order, taking account of the higher axle loads permitted in recent years and to provide safe and comfortable driving conditions for road users. Expenditure will be targeted using road condition survey data and will have regard to the timetable for construction of new sections of road.

A sum of €43.2 million of the overall pavement provision will be allocated to a five year pavement restoration programme for national secondary roads launched by the authority last year. It is allocating over €9 million to local authorities for road safety measures this year. This will allow for accident reduction measures at 80 locations as well as 20 traffic calming schemes on the network. The authority will separately spend a further €5.6 million on road safety measures for which we are directly responsible. These concern our centralised signing and lining programme, intelligent transport system initiatives and our continued operation of the recently launched web based services which provide weather and road surface conditions information as an aid to road users in journey planning.

Further details concerning the status of the various schemes involved in the authority's programme are set out in the appendices I am circulating with this statement. I am especially pleased about the invitation extended to the Northern Ireland Roads Service to attend today's meeting. The authority and the Roads Service share many common objectives as regards the quality and safety of our respective road networks. We also have a good track record of co-operation on cross-Border road schemes of mutual interest. In this connection, we have recently commenced the statutory process for the Dundalk to Newry scheme and proposals are advancing to upgrade the N14-N15 from Lifford in County Donegal and the A5 to Strabane in Northern Ireland. We are also working together on two intelligent transport systems, ITS, projects, INSTANT and STREETWISE, which respectively look at traffic information for users of the M1 corridor and broader trans-European network-transport, TEN-T.

The authority's current programme includes a number of projects of cross-Border interest, such as planned bypasses of Carrickmacross, Castleblayney and Monaghan on the N2 Dublin to Derry Road. Last year, a strategic study was carried out on the development of an east-west route from Sligo to Dundalk as part of a commitment in the NDP to investigate potential new routes. The M1 Dublin-Belfast corridor has long been regarded as a key communications route and economic driver in the all-Ireland context. Under the NDP, the M1 is to be developed to motorway standard to north of Dundalk. Projects under construction such as the Drogheda bypass, Cloghran-Lissenhall and Lissenhall-Balbriggan, have a combined estimated cost in excess of €450 million. We anticipate that these three sections will be completed by mid-year. It will then be possible to travel on continuous motorway from Dublin to south of Dundalk, a distance of 72 kilometres. The journey should take less than 50 minutes, a practical example of the benefits we are working to achieve throughout the country in upgrading the network of national roads in line with the policy set out in the NDP.

Chairman

Thank you. The Newry to Dundalk road is being done at a cost of €70 million. What is the difference in cost per mile between the North and the South or is there a difference?

Mr. Tobin

I do not have a per kilometre cost readily available but I will get the information and pass it on to the committee.

Dr. McKibben

It is intended that the cost apportionment will be on the basis of the mileage of road network in each jurisdiction which will each cover the costs incurred in its own jurisdiction.

Chairman

The road will cost €70 million, but I want to know what it costs per kilometre north of the Border and south of the Border.

Mr. Tobin

It has been whispered into my ear that the costs are very much the same. There is little to choose between the unit costs our colleagues on the northern side anticipate and those we anticipate.

Chairman

I remind everybody that spokespersons may have six minutes and other members three minutes.

Deputy Shortall

I thank the two delegations. Their presentations were very different and both deserve further probing. The question asked by the Chairman is key and I am surprised nobody was in a position to answer it. Cost overruns are a major problem here. The presentation from the Roads Service of Northern Ireland was impressive and informative. Will the delegation give us more information on costs and difficulties with contracts? There was no reference to that issue in the presentation and I wonder if that is because everything is fine and working smoothly. Does the Roads Service have problems in this regard?

We have had major difficulties with this in recent years and there have been massive cost overruns for all infrastructural projects. This is a matter of concern. None of us is in a position to solve the puzzle. The Dublin Port tunnel, for example, started off six or seven years ago at an estimated cost of €180 million. Now the figure being mentioned is €650 million. Nobody seems to bat an eyelid at that and nobody is able to say why that has happened. What is responsible for that huge leap in cost? There appear to be no controls. How do our colleagues in the North manage that issue?

What steps have the NRA taken over recent years to deal with spiralling costs? This issue may not have been as urgent during the boom years although all State agencies should have been mindful of runaway costs. Now that money is tight people are concentrating more on the issue. Mr. Tobin lists eight actions the authority is taking to try to deal with the problem. It seems a bit late in the day to be introducing these measures. An enormous amount of money has been spent on roads projects over the past ten years, yet it is only now that we are beginning to introduce what would be regarded as basic controls. Why are those controls only getting attention now?

It would be helpful to get a reply to the Chairman's question about the comparative costs per kilometre of motorway in each region. If one authority is able to do it significantly cheaper than another, that expertise should be shared. I presume one of the intentions of co-operation between the two authorities on projects is that there is also a sharing of expertise. To what extent has Mr. Tobin examined the question of fixed cost contracts and what has been the outcome of that consideration?

I am concerned that no penalty clauses appear to be included in contracts that have overrun. The penalty clause is a standard part of many major public contracts such as projects in the house building area. If a project which should have been completed in two years runs to three and a half years there is then a clawback for the State. What is the view of the delegations on the use of penalty clauses?

Engineering consultants' fees are often based on a percentage of the eventual cost of the contract. That is clearly not in the public interest. The fee should be fixed. This issue was highlighted in the Comptroller and Auditor General's consideration of the Abbotstown project. He was critical of that practice. Why is that practice being allowed to continue on road building projects? What has the NRA done to highlight the problem?

The Government contracts committee and the standard form of contract were mentioned. It was said that the Department of Finance will not allow deviation from this. How long has the standard form of contract been in operation and when was it last reviewed? Why has it not been brought up to date to deal with the runaway costs with which we have been faced in recent years? It was said that it is under consideration by the committee. When is the committee likely to report and how are its proceedings going at the moment?

PPPs are hailed as the solution to many things. They let the Government off the hook in terms of providing up-front funding for projects. What are the main advantages of using PPPs for roads in the long-term? Can somebody from the NRA talk about the selection of projects for funding? What is the selection procedure? Does the NRA make recommendations to Government or are the decisions solely political? On what are those selections based? I was looking at the figures from cost benefit analyses that had been carried out on a number of the projects. The selection does not seem to bear any relationship to the rate of return that comes out of the cost benefit analysis. What criteria are applied when deciding to go ahead with contracts?

Deputy Ellis

I welcome the members of the Northern Ireland Roads Service, Dr. McKibben and Mr. Orr, and the members of the NRA, Mr. Tobin, Mr. O'Connor and Mr. Egan. I have a few parochial questions to ask. Based on the presentation, the A4 seems to die westwards beyond Ballygawley. I live 20 miles south of Enniskillen and it appears that for the past 15 or 20 years there has been little or no expenditure on that section by the Northern Ireland Roads Service, bar the Enniskillen bypass. Is the prioritisation of roads a political decision? Based on the presentation, that certainly seems to be the case. The north-eastern and eastern part of the Six Counties is the area that seems to get the greatest road investment and the rest seems to be left to the wolves.

The A4 becomes the N16 leading into Sligo and on into the west of Ireland. This has only received minor funding by the NRA. This road carries an enormous amount of traffic from the west and is a lead road to Larne in the north-west. Larne is still the major port for goods leaving the north-west and west. Will the NRA and the Northern authorities consider developing this route as part of the east-west, or Dundalk to Sligo, road that has been mentioned? Both would have considerable common ground and would take in the N16.

Does the Northern Ireland Roads Service use fixed price contracting or are design and build packages used? When will the NRA start to use fixed price contracts? It has run into major problems with overruns and costings are totally out of line with what was originally planned. Will the Kilcock to Kinnegad public private partnership be the forerunner of many more such projects, even if they are not to be tolled? Many of the projects on the NRA's schedule for the next ten years could well be moved up by the use of public private partnership even if they were to be paid for in full by the Exchequer. That needs to be considered.

Does the NRA have any design and build projects rather than having the design work done on the NRA's behalf by local authorities and then getting a contractor to carry out the work?

Deputy P. Breen

I apologise on behalf of my colleague Deputy Naughten who is unfortunately unable to attend this afternoon's meeting. I enjoyed both interesting presentations. Like my colleague, Deputy Shortall, I am concerned about a number of issues, particularly the criteria that determine which road building projects proceed. The Minister for Transport indicated his priorities as the BMW region and the city-to-city routes. How did the NRA get it so wrong? In the national development plan about €9 billion was originally provided over the six years and the cost is now estimated to be €16 billion or €17 billion. No new roads projects commenced in 2001. The NRA has a very ambitious programme, announced last month. Is there a danger that there may be cost overruns and that many of the big projects may not be completed and may need additional funding? Is it possible that some of the projects scheduled to commence in 2004 might not now take place?

In 2001 four projects were suspended, namely, the bypasses at Monasterevin, Carrickmacross, Cashel and Ennis. Three of these projects got the go-ahead this year. I have spoken to Mr. Egan on a number of occasions and he knows about my interest in the Ennis bypass. Why could these projects not have gone to tender when they were suspended in 2001? In the case of the Ennis bypass, the tender date was 22 August and the original closing date was 3 October 2001 but many contractors wanted an extension and on 14 November the NRA suspended the tender process. In County Clare we feel that we are only getting a small piece of the cake. We are now told there is a possibility the project may go to tender at the end of 2004, but we have no real assurances that will happen.

What mechanisms are in place to ensure the NRA's road building schedule reflects the priorities of the national spatial strategy? What is the policy of the NRA on the upgrading of national secondary routes? Will there be major national secondary road building projects or will we just improve sight distance and improve the roads generally?

Deputy Glennon

I join my colleagues in welcoming both delegations, particularly the one from Northern Ireland. Like my colleague, Deputy Ellis, I will be parochial - I hope members forgive me for that - but obviously the M1 Dublin to Belfast corridor is of particular interest. I share the disappointment of my colleagues at the lack of financial information on the outstanding span of this project at Dundalk. While we welcome wholeheartedly the co-operation that is evident between the two bodies, nevertheless value for money is a crucial aspect of all projects and is an issue of very keen concern to this committee. I tried to do some quick calculations of the cost of the 72 kilometres referred to by Mr. Tobin from Dublin to south of Dundalk. Allowing for the two elements of that project already in place, namely, the Balbriggan bypass and the Dunleer bypass, I came up with a cost of approximately €9 million per kilometre. Will Dr. McKibben confirm that figure? I would be interested to hear from our Northern Ireland colleagues as to whether that is in line with costings in the North. On the estimate process, I share the dismay of my colleagues at the extent of overrun we are experiencing in the Twenty-Six counties in relation to projects. One sometimes questions the estimate process - I have in mind in particular the Dublin Port tunnel project. Deputy Shortall mentioned some figures which I believe are correct, allowing for conversion from punts to euro. We are told the project is on time but the cost overrun is, if I may say so, ridiculous. I would welcome further details in that regard.

Deputy P. Power

I join in welcoming both delegations, particularly our guests from the North. I thank them for taking the time to join us today. Many points I had intended to raise have been dealt with by my colleagues, particularly on the area of costs. At the outset, any projects embarked on by the NRA seem to be of a very high quality product in terms of physical construction, procurement and delivery. There seems to be general consensus on that. I would like to have Mr. Tobin's response to the view alluded to in questions from the Committee of Public Accounts and in the Fitzpatrick report that the NRA is strong in project management, in terms of engineering skills, delivery on schedule and so on, but is very weak on financial control and management and not at all top-heavy in financial structure. All other questions seem to flow from that basic question. Deputy Shortall referred to the timing of some initiatives undertaken by the NRA, specifically the appointment of a costs estimation specialist. That should have been done a long time ago.

A critical evaluation of the type of contracts entered into appears to be seriously delayed. I am seeking a response to these perceived weaknesses of the NRA, such as the failure to seek out international contractors to introduce an element of competitiveness into the tendering process. While I cannot say that the anecdotal evidence available to public representatives is 100% correct, much of it suggests that the Irish Exchequer, through the NRA, may tend to be a "soft touch" for contractors in this country, in the absence of sufficient contractors to satisfy the enormous demand for projects now in hand by the NRA. I also echo the comments of my colleagues in relation to fixed price contracts.

An enormous problem seems to have developed in recent years with regard to land acquisition costs and I appreciate the difficult situation of the NRA in that context. Will Mr. Tobin confirm a recently published estimate that the land acquisition cost for the last ten kilometres of the M50 motorway will be in the order of €300,000? What are his views as to how such costs can be addressed?

Chairman

I ask the Deputy to conclude as we are running over time.

Deputy P. Power

I have just one further brief point, Chairman. There is a great deal of political comment and debate on priorities in relation to public capital expenditure in terms of roads, schools and education and hospitals. We have deliberately decided to front-load our NDP expenditure on road construction and there is a public perception that we are not getting value for money in that regard. Like other colleagues, I wish to throw in one parochial question in relation to the southern ring road in Limerick which has been earmarked as a PPP project. What is the timeline for delivery on that? On the overall PPP issue, is it the view that——

Chairman

The Deputy is way over time.

Deputy P. Power

——PPP will deliver projects sooner than traditional procurement methods?

Chairman

I ask Dr. McKibben or Mr. Orr to take the most relevant questions.

Dr. McKibben

We will split the answers between us. I will deal with the strategic issues and Mr. Orr with the more contract-specific issues. Deputy Ellis asked about our selection process for capital projects. In devising our regional transportation strategy, we assessed all types of transportation projects, including major roads projects, against five different criteria, including the benefits to the economy, the environment, safety, integration and accessibility. To that we added what we describe as three supporting analyses, looking at issues such as financial affordability and sustainablity; distribution and equity and practicality and public acceptability. Our assessment on the basis of those criteria determined the schemes to be brought forward.

Major road programmes are being brought forward in what I referred to earlier as the regional strategic transportation network plan, which is due for completion by the end of 2003. On the Enniskillen corridor in particular, there are significant improvements from Belfast along the west link and the dualling of the M1 from Dungannon to Ballygawley. From there, there will be some improvements in terms of road alignment and wide singles on the way to Enniskillen and beyond. One has to bear in mind the traffic levels on those roads. Between Fivemiletown and Enniskillen, the traffic flow is probably 10,000 or 11,000 vehicles per day and to the west of Enniskillen, approximately 4,000 vehicles per day so there is not a phenomenal amount of traffic.

On Deputy Shortall's question on PPPs, I will outline what is happening in the North. On 19 February, Mr. Ian Pearson, the Minister responsible for the Finance Department, announced that we would bring forward the west link scheme as part of a PPP package. Indeed, there is a move towards increasing the number of PPPs, particularly for highway schemes which are considered good value for money. We may well look at other corridors which we can advance through that particular mechanism.

On Deputy Glennon's point, I am slightly concerned by the impression that we do not know the price of the Newry-Dundalk road. We do - the estimated cost is about £70 million for that 14.3 kilometres of road, of which we anticipate that £23 million will be spent in the North, for which those with calculators can work out that the cost per kilometre is approximately £5.4 million for what is a high grade dual carriageway.

Chairman

How many kilometres of the road are in the North?

Dr. McKibben

The section in the North, on the blue route which is going forward to the public inquiry, is 4.3 kilometres long. There are ten kilometres in the South.

Deputy Shortall

Are your prices in sterling?

Dr. McKibben

Yes. It works out at about £5.4 million per kilometre - the conversion factor to euro is 1.55. Mr. Orr will deal with some of the contract issues raised.

Mr. Orr

Deputies Shortall and Ellis mentioned cost overruns and the fixed price nature of contracts. There are two types of cost overrun. First, the initial estimate may not match up with the tender price. There could be two reasons for that, getting the estimate wrong, which sometimes happens, and, more frequently, work is often added as a scheme goes out to public consultation. For example, during public consultation, a flyover junction may be found to be wanted instead of a roundabout. Costs can increase during the estimate stage.

The second stage at which costs can increase is during construction. One starts with a tender price and then looks towards the end of a contract to find out how much a project actually costs. A recent study on this in the UK found that for major construction projects in the UK, on average, the cost increase between tender and outturn was in the order of 30%. That has occasionally been the experience of the Northern Ireland Roads Service.

There can be fixed price contracts, which was the question asked by both Deputies. However, those contracts will be even more expensive to buy than the outturn price of a normal contract because of the risk associated with major construction projects. For example, a contractor may be asked for a fixed price contract with absolutely no increases. That contractor will have to allow for the risk of poor ground conditions, poor weather conditions and delays, and that will be included in the fixed price tender. Fixed price contracts, although possible, may not represent best value for money.

There is an attempt in Northern Ireland to address the serious issue of cost increases during the construction phase by considering an innovative construction procurement method for the largest contracts. This involves a target price contract where a target price is agreed with the contractor and it is then agreed to share overruns or savings on that price using a pain-gain mechanism. For example, if on a £20 million contract the final outturn is £22 million, it will have been agreed in the contract to share that overrun with the contractor, perhaps on a 50-50 basis. Similarly, if the contract comes in £2 million under budget, the savings would be shared. This type of contract is at an early stage but it has been found that it promotes partnership between the contractor and client, with both parties working in tandem to identify savings and mitigate cost overruns. I hope that is of some help to the committee with regard to costings, but there will be overruns.

Chairman

In effect, Mr. Orr is saying that it costs €35 million to build in Northern Ireland and it costs us the same. However, 4.3 kilometres were built in Northern Ireland whereas ten were built here. We did very well.

Dr. McKibben

I said that it cost £70 million, about £23 million of which involved the Roads Service, which is about one third. The length of road - 4.3 kilometres of 13 kilometres - is also about one third. Mr. Tobin was correct that the costings per kilometre were very similar.

Mr. Orr

There is no cost for this scheme as it is still at the estimate stage.

Mr. Tobin

It will be €150 million in that case.

Deputy Shortall

Is there a cost estimation specialist in the service in Northern Ireland? How does the service get it right?

Mr. Orr

There is no cost estimation specialist and the Roads Service does not always get estimates right, although it tries its best. It is important to appreciate that on occasion the scheme which is originally estimated is not the scheme actually built. That is where things have gone wrong for us. We have employed consultants, who employ cost management consultants, similar to those Mr. Tobin mentioned. There is no in-house specialist.

Dr. McKibben

It is a management concern of the Roads Service to accurately estimate costs. We are pricing capital roads schemes for ten years ahead. If a significant percentage of the estimates are wrong, it will cause major problems for financial planners in the future. We are equally obsessed with the need to improve our estimates on the outturn of contracts rather than the initial cost.

Mr. Tobin

There is a view that the NRA is good at managing engineering but bad at managing cost. However, the recent Fitzpatrick report stated that cost control procedures appear to be adequate at the level of individual projects. That echoes a similar comment made by DKM, which undertook a mid-term review of the authority's previous programme, the operational programme for transport. I do not accept that the authority is a soft touch or that it or its partners, the local authorities, are seen by the contracting industry as such.

Chairman

Why do you think the authority is seen in that way?

Mr. Tobin

I have heard comments at the committee that suggest the NRA is seen as a soft touch. I assure the committee that is not the case, and that is borne out by the Fitzpatrick report and the previous report by DKM in the context of the mid-term review of the operational programme for transport.

Chairman

It is not just members of the committee who are saying this because the committee talks to various groups before forming an opinion. Deputy Power put it well when he said that the roads built by the NRA are to a very high standard. That is recognised and the NRA is to be congratulated on it. However, with regard to financial matters, the NRA is not seen as delivering as well as on road quality. Overruns are huge and there is concern about that.

Mr. Tobin

I take your point, Chairman. I again refer the committee to the Fitzpatrick report and the issues raised by Mr. Orr and me. We are using a form of contract which makes provision for payments of additional sums to a contractor who encounters unforeseen conditions, bad weather conditions, problems with archaeology and so on, plus cost inflation. In 1999, there was 15% cost inflation in the construction industry; in 2000, there was 15%; in 2001, there was 10%; and last year, thankfully, that dropped to about 5%, at a best guess. It could be argued that the ambitious size of the roads programme may have contributed in a small way to the level of inflation in the industry. As chief executive of the NRA, I do not accept that the organisation has caused the inflation, that we have control over it or that we can manage it. I do not think that is a realistic presumption.

It has been suggested that insufficient efforts have been made to attract foreign contractors. A consortium of UK and Japanese firms is building the Dublin Port tunnel, although that may be a bad example. A Turkish firm is building at Ballincollig and an English firm is involved in road construction at Watergrasshill. Companies involved in the four PPPs which are under consideration include Nuttall, Dragados, AWG, Hochtief, Carillion, Balfour Beatty, Egis, WS Atkins, BES, Cintra, Vinci, Graham and Bilfinger Berger, from countries like Portugal, Spain, Germany and Northern Ireland.

Deputy P. Power

The companies mentioned are interested in future projects, but are not involved in projects which are being delivered at present.

Mr. Tobin

The Kilcock-Kinnegad project will be signed off shortly and the port tunnel, Watergrasshill and Ballincollig projects are under way. The NRA was involved in a roadshow that went to a number of countries to make presentations about the forthcoming programme. We have attracted significant interest from contractors beyond our shores.

It has been suggested that land for the south-eastern motorway will cost about €300 million and I admit that is the NRA's best estimate of the likely cost. This frightening amount of money represents about two thirds of the project's overall cost. I wish I had an easy solution, but I do not. Most members of the committee are aware that the Government decided not to take the advice of the Kenny report in the 1970s, which recommended that steps be taken to control the cost of land. I recently read in a newspaper that an Oireachtas committee has suggested that the issue be examined further. The NRA would welcome any initiative which would help to reduce the cost of land for its projects. Although the land costs on the south-eastern motorway are exceptional, the NRA is concerned that the cost of land is escalating in the vicinity of urban areas. I see no reason to believe that this will change if something is not done about it.

The NRA expects that the second phase of the Limerick ring road project, which involves a river crossing, will be the subject of a public inquiry later this year and will progress as quickly as possible thereafter. The cost per kilometre of the Newry-Dundalk project has been dealt with adequately. I wish to make a couple of points in response to Deputy Shortall's comments on the Dublin Port tunnel. The cost of the port tunnel project increased, in 1999 prices, by €40 million as a result of a decision of the elected members of Dublin City Council. When one considers that there has been inflation of 15%, 15%, 10% and 5% in the years since then, the cost of the councillors' decision can be easily worked out.

Deputy Shortall

The decision of the elected members added €40 million to the cost of the project.

Mr. Tobin

Yes, in 1999 prices.

Deputy Shortall

Will the NRA explain the total cost increase from €180 million to €650 million?

Mr. Tobin

I cannot explain it in full.

Deputy Shortall

With all due respect, I think it is a cheap shot on the part of Mr. Tobin to blame elected members——

Mr. Tobin

I am not blaming anybody.

Deputy Shortall

——who took a decision that resulted in an increase of €40 million. I am asking the NRA to account for a more than threefold increase in the cost of the project.

Mr. Tobin

The original estimate did not include work with a cost of €40 million, in 1999 prices. The figure should be modified to take account of the annual rates of inflation I have mentioned, which are part of the reason. Many serious incidents have taken place in tunnels in recent years. The NRA has attempted to put in place the most up-to-date standards in the tunnel. The tender process for the tunnel took place at a time when the market was tight and the competition was not as good as it is at other times. I repeat that inflation on the project was 15% in 1999, 15% in 2000, 10% in 2001 and 5% in 2002. If one takes all these matters into account, it can be said that the moneys spent on this project show a good economic return, on the basis of any cost benefit analysis.

My colleague, Mr. Orr, has dealt at length with the issue of fixed price contracts and I share his view, although I urge people to be cautious. A fixed price contract means that a contractor will say how much it will cost to deliver a certain product in a given time before he or she goes on site. A contractor takes on board a number of risks when determining the price of his or her work. Unforeseen events, such as bad weather, may add to costs and are added to the price regardless of whether they occur. One may pay money that it was unnecessary to pay. If the contractor had predicted that inflation was to follow the pattern I have outlined and priced accordingly, but it had followed the lower rates of the mid-1990s, he or she would have received a large bonus for providing a fixed price contract. It is possible to operate a fixed price system if that is what is agreed, but I do not believe that it necessarily delivers the best value. The penalty clauses in our contracts are implemented, but they are never a significant amount because of court decisions. Almost all projects have been finished on time or ahead of time in recent years.

Percentage-based consultancy fees were mentioned as part of the discussion on Abbotstown. The contract for that project, which attracted a great deal of media attention, related to executive services, which is a different matter from that with which we are dealing. The committee is right to suggest that the fee paid for a project is based on a percentage of the project's value, a procedure that is required by a 1987 Department of Finance circular. The fees are segmented, however, so that the first 20% of fees in a traditional contract is payable on production of a preliminary report. An estimate is agreed for the project at that point and the payable 20% is worked out and fixed, regardless of what might happen subsequently. There can be no drift from that. The next 50% of fees, which is determined by reference to the tender price and does not drift with any change in the outturn cost, is payable on the basis of bringing the project to construction.

The only part of the fee that varies as a result of the final cost is the final 30%, where the consultant is overseeing the contract. As consultancy costs increase with inflation, it is not unreasonable that consultants' fees should also increase if a contract increases. If a consultant is at the supervision stage, things are happening on site and changes are occurring. It is important that the work is overseen so that value for money and certain standards can be guaranteed. It is not unreasonable that the final 30% of fees should reflect the outturn cost of the project.

Deputy Shortall

Is the NRA satisfied with the system?

Mr. Tobin

The NRA believes that it is a reasonably good system.

Deputy Shortall

The Minister does not agree.

Chairman

It is important, from a political point of view, that the committee understands as much as possible when people like Mr. Tobin attend meetings. Deputy Shortall made the point that even with inflation, adding the 45% and the €60 million to the €180 million, it is still only €350 million. That is far short of what the tunnel is costing. Politicians are informed that infrastructure needs to be built and that it will cost a certain amount of money, but the figures subsequently turn out to be completely wrong. How can costs increase to such an extent? We have adjusted for inflation, but the final cost of the tunnel is €650 million, which leaves us with €300 million to account for. It is extraordinary.

Mr. Tobin

It is an enormous increase.

Chairman

Where did the money go?

Mr. Tobin

That is what came to us by way of tender. There was an open, international competition and these are the prices we could get.

Chairman

The original city council budget was €180 million.

Mr. Tobin

We have to accept that our initial estimate was wrong. We have added to the length of the tunnel and increased the standard as a result of international tunnel accidents. The price of the tunnel was determined by an open competition of bidding by international firms. We miscalled the likely cost.

Chairman

If the machine to bore the hole were allowed to operate 24 hours per day, would costs decrease?

Mr. Tobin

It might if that were practical, but it is not. The expectation was that vibrations transmitted to ground level by work on the south bound tunnel under Marino would not be heard, but up to a number of weeks ago, the machine itself could be heard. It is unacceptable to run it all the time as people need to sleep. The machine draws as much power as Ardnacrusha generates, which makes for a very big animal grinding at rock and creating a great deal of noise. The contractor will work every hour possible, but those who live overhead must be considered.

The standard form of contract has been in use for 15 to 20 years. No public sector body can unilaterally depart from a contract's terms.

Deputy Shortall

Is Mr. Tobin saying that the standard form of contract for all public civil engineering works has not been reviewed in 15 years?

Mr. Tobin

It has not been changed significantly in that time. There may have been some minor amendments, but the basic contract has been in place for something like that length of time. The prohibition is on unilateral departure from the contract, but we have piloted a number of design and build contracts the perceived advantages of which I have mentioned. We did that with approval from the Government contracts committee and I suspect that the group which is examining the form of contract we use may have something to say on the prescribed form. Greater leeway will probably be given to bodies like ours to find forms of contract which offer more certainty of outturn cost than can be guaranteed by the traditional terms.

Deputy Shortall

When is the group due to report?

Mr. Tobin

I cannot call that as the group is being run within central Government, but I estimate two to three months.

A major advantage of the type of public private partnership contract we use is that capital construction costs are known from the outset subject, in the case of some annual payments, to an inflator tied to the consumer price index. We have identified ten or 11 public private partnerships to be implemented, four of which are at an advanced stage of planning. In the past we have used a mechanism whereby private sector investment is remunerated from tolls with some State subsidy in larger contracts at construction and operations stage. We are not sure it will be suitable to run additional projects in that way, but it is something we keep under review. One of the key factors in the viability of hard toll public private partnership projects is the volume of traffic using the roads and that is increasing all the time. Projects which might not have seemed likely candidates may appear so within three years.

Deputy Breen asked why the Ennis project did not go directly to tender. We were anxious in the time available to switch from the traditional form of contract to more advantageous design and build terms. There are also gains to be had from attempting to resolve the archaeological issues arising in this case in advance of placing a contractor on site. We have provided €16.8 million this year to allow archaeological works to proceed and to acquire property. As soon as we are satisfied there are no major sticking points on the archaeological side, we will allow the project to move to the tender phase and we expect construction to begin next year.

Deputy P. Breen

Were archaeological works carried out before the tender was suspended in November 2001? Surely, major surveys were made in relation to the routing of the road.

Mr. Tobin

Investigations were undertaken, but we are now talking about discovered and potential archaeological sites. We must open the ground and evaluate what we find before we can deal with it.

Deputy P. Breen

If the tender had not been suspended in 2001, would these archaeological surveys have been carried out in tandem with the contract?

Mr. Tobin

It is almost certain they would, which would have risked disrupting the work of a contractor due to a significant archaeological find.

Chairman

I will suspend the meeting for two minutes as Dr. McKibben and Mr. Orr must catch a train. On behalf of the committee, I thank them for attending what I hope is the first of many meetings which various bodies from the North of Ireland will have with Oireachtas committees. I thank them for the informative presentations they made.

Dr. McKibben

I thank the Chairman for his hospitality and the positive manner of his reception.

Chairman

Members will be aware that the train leaves on time.

Sitting suspended at 4.20 p.m. and resumed at 4.21 p.m.

Mr. Tobin

Deputy Ellis raised a question about Sligo. The position there is somewhat similar to that in Ennis. A sum in the order of €11 million has been provided this year to allow archaeological resolutions to be made and properties to be bought as the need arises. The project will proceed to tender as soon as we are satisfied there are no major problems on the archaeological side and we hope construction work will then commence some time next year.

Deputy Ellis

A completion date for the project was set at 2004. Obviously, however, we will be lucky if construction work starts next year. What date does Mr. Tobin envisage as the time limit on the contract?

Mr. Tobin

The likelihood is two and a half to three years in construction.

Deputy Ellis

For a mile and a half to two and a half miles of road?

Mr. Tobin

I apologise for my error. A construction period of two years is envisaged for the project in Sligo.

Deputy Ellis

It will be at least 18 months to two years behind schedule.

Mr. Tobin

Yes.

Deputy Ellis

I also raised a question on the east-west road.

Mr. Tobin

That is correct. It might be useful to link that issue with the national spatial strategy, which has also been raised. The national development plan pre-dated both the national spatial strategy and the east-west study. We have the study to hand, but there are those who have differing views about the route it should take at the western end once it reaches Cavan. However, all sides are in agreement that it should proceed to Cavan and from there to Aghalane and Enniskillen and on to Sligo.

Deputy Ellis

Will it go from Enniskillen to Sligo or Enniskillen to Belleek?

Mr. Tobin

I said Enniskillen to Sligo.

Deputy Ellis

Yes, but Mr. Tobin did not say which route the road would take after Enniskillen.

Mr. Tobin

It will proceed to Sligo.

Deputy Ellis

This is a pertinent issue. Will the route be Enniskillen to Belleek and on to Ballyshannon, or Enniskillen to Manorhamilton?

Mr. Tobin

I have to admit the Deputy's question is too detailed for me to answer.

Deputy Ellis

I would expect the road to go from Enniskillen to Manorhamilton if it is to take a direct route.

Mr. Tobin

As I am not sure of the answer, I will send the Deputy a note with the relevant details if he wishes. The point I was about to address was that both the spatial strategy and the east-west study have been finalised since the NDP was published. As matters stand, the east-west route is not a national road despite the fact that we financed the cost of the study. Both issues fall to be considered in the context of a mid-term review of our programme, which has been initiated and will be completed in the course of the year.

A question was raised as to our current strategy on national secondary routes. We are concentrating almost entirely on a pavement restoration programme. In the current year one major project on national secondary routes is being undertaken and is already under way, namely, a bypass of Skibbereen. It is not our intention to start any other major projects on national secondary routes until the pavement restoration programme has been successfully completed, which should take about two to three years.

The question was asked as to the reason we have such poor surface quality on our national secondary routes, which is certainly the case in many places. We have invested €44 million in the programme in the current year and expect that two to three years will bring us to a point where all the national secondary routes will have a decent surface on which people can drive comfortably. We will then contemplate proceeding to road widening, the removal of bends and the bypassing of urban areas. Our emphasis in the meantime will continue to focus heavily on pavement restoration work.

I hope I have touched on the various points raised by the contributors to the debate. Perhaps the Chairman will remind me if I omitted anything.

Senator Browne

I apologise in advance if questions I raise have already been asked. I had to leave for a division in the Seanad. How do we compare with the other European Union member states and other countries in terms of road building costs and the construction periods for high quality dual carriageways? I am aware the European Commission is compiling information on this issue, which is not yet available.

In terms of road building, I feel there are too many chefs in the kitchen. We seem to be constantly attacking ourselves. When a project commences, Dúchas and An Taisce first get involved followed by An Bord Pleanála at a later stage. We also have environmental impact studies. While one arm of the State appears to be doing one thing, another counteracts it with the result that projects are delayed and costs spiral. As far as I am aware, the system in America is completely different.

Mr. Tobin referred to construction inflation. I understand materials have not been affected by inflation. Are labour costs the main source of the increase in inflation?

Chairman

All these questions have been covered in detail.

Senator Browne

I see. My final question relates to the cost of objectors. Does Mr. Tobin feel it would be appropriate to publish the costs to the taxpayer of delays caused by objections to road building projects? While objectors may feel they are doing the public a favour, they are doing it a disservice by delaying projects for years or even threatening them.

Senator Coghlan

I welcome Mr. Tobin, Mr. O'Connor and Mr. Egan. I have a few brief questions concerning matters in my locality, about which I expect the witnesses will be familiar. I ask them to comment on the proposed national primary route from Farranfore to Killarney, which will sweep by Killarney, for which there are four proposals. The entire community of 12 townlands, with which Mr. O'Connor will be familiar, namely, Park, Teernaboul, Tullig, Radrinagh, Tullorum, Kilbrean Beg, Kilbrean More, Knockaninane West, Knockeanagh, Knockmanagh, Knocknahoe and Knocknaskeha, are concerned.

I thank the Chairman for bearing with me as I am here by accident having met one of the witnesses by chance earlier from whom I learned about this meeting. I was at a public meeting last night at which the community of Lissavane and the general area expressed its concerns. Has the NRA carried out a cost analysis of upgrading or widening the current road? Perhaps this is not possible.

I accept there are arguments to the effect that one cannot go through Brennan's Glen because of archaeological sites and its wooded nature. Previously work on woodlands caused inordinate delays in other projects. I ask for a comment on this. How or when will a decision be made on an exact route? How are the concerns viewed and have strategies been devised to get around them?

I previously argued, as a member of Kerry County Council——

Chairman

The Senator's time has expired.

Senator Coghlan

In view of the back-up of traffic on the Lissavigeen-Mallow road, the proposal to construct a roundabout is like putting a gate across the road. This should be well known. It is disgraceful that whoever put forward this proposal got away with it. The entire community in Killarney and its environs is clamouring for a roundabout that would solve the problem but the current proposal will exacerbate the problem.

Chairman

Time, Senator. The combination of a wood and an archaeological dig does not bode well for the project.

Senator Dooley

I apologise for my absence due to a vote on another matter which is pertinent today. I am sure that my colleagues have dealt with most of the issues that are of concern to me. However, I would like some clarification on the interaction between the NRA and the Government, particularly the Minister. It seems there are legislative measures that might assist with the problems that arise from time to time. Matters of land acquisition or dealing with objectors have been solved in other countries and it was interesting to hear from our colleagues from the North in this regard. How do the NRA representatives envisage their role and what would assist them in the development of their work? Is that something they expect to come from the Department or the Oireachtas, or are they lobbying for particular issues to which they hope we will respond.

Chairman

Deputy Eamon Ryan has one minute in which to ask a question.

Deputy Eamon Ryan

Yes, an Irish minute. I am glad to have an opportunity to address some remarks to the National Roads Authority. There are many questions which I could ask but there is one of central importance. How does it see the role of planning in regard to roads development? My concern is that our national roads plan is framing the development of the country. What we have seen along the M50 or the main national primaries is unregulated and unplanned development. What role does the NRA see itself having in regulating development on the roads to make them sustainable in terms of transport and to make our societal development sustainable?

It is my experience to date that we have not looked at the planning applications. Certainly local authorities have not done so and it seems the NRA has not put any thought into the planning implications in terms of providing access to the roads and the overall transport patterns that come with the roads. It seems the further development of our road network will reinforce long-distance commuting and use of these roads for what might be described as non-strategic national traffic which will lead to a clogged system. What role does the NRA have in the planning aspect of transport and does the NRA agree that, to date, we have failed to link our transport and planning both at local and national level?

Chairman

Some very localised questions have been raised so Mr. Tobin may wish to reply directly to the members.

Mr. Tobin

If Senator Coghlan will bear with me, I may contact him directly. He asked some very detailed questions in regard to Farranfore and Killarney. I would be glad to provide whatever information I can to help him.

Labour costs have certainly been a major factor as to why we have been subject to such a level of inflation. Currently we estimate that 50% of the overall costs of a contract is spent on labour. In a single day in the past three years labour costs went up by 23% or 24%. I am sorely tempted to publish details of the cost implications to the State and the taxpayer of some of the objections that are received against road projects but it would cause a major row.

Senator Dooley

Will we get it under FOI?

Mr. Tobin

We have rough ideas but as soon as one publishes something like that there is no doubt that it will be disputed. I do not know that there would be any great gain by doing so but the point is well made that it brings a very significant additional cost arising from the delays that occur when a lot of objections are made in regard to roads.

Our function in law has a narrow focus. We are expected to oversee the improvement and maintenance of a network of national roads. That is our sole function. We do not have a remit to weigh up the niceties between investment in roads and public transport and other areas of the economy. The national development plan set out a level of investment in the national road network, which as far as I can see was done following wide-ranging consultation with the public, the social partners and so on, after which the Government opted for a certain level of spending on roads. It is our task as an agency to implement the policy and ensure that the programme is delivered.

I acknowledge the openness of the Minister in regard to suggestions on legislative issues. On a number of occasions he has said to us that if we perceive that existing law is hindering delivery of the programme we should make a case to him. We are in the process of putting together a submission in the context of the sub-group that is looking at the cost of our programme and its delivery as well as forms of contract in regard to programme delivery. This may include suggested legislative changes such as in regard to the cost of land.

Planning is not part of our function. We have a policy in that area which we adopted from the Department of the Environment and Local Government in that we ask local authorities not to grant planning permission giving direct access to national primary roads. I hope that the logic of this policy is fairly self-explanatory. Having made a significant investment in new roads, it is clear that creating new access brings up issues of safety and defeats the purpose of much of the investment made by us. That said, as a State agency we have to recognise that the law has set out the method of operation of the planning process. Local authorities adopt development plans and take the decisions which are, in turn, subject to appeal by a disappointed applicant or a disgruntled or upset objector who is not the applicant, to An Bord Pleanála. That is how the planning system operates.

Chairman

We have now been sitting for more than two and a half hours.

Deputy Eamon Ryan

Very briefly, I was involved in the consultation process in 1998. I remember getting a presentation from the NRA in the Institute of Engineers. It was interesting that the consultation proposed something very different from what we are getting. What consultation has occurred or what transport planning or economic analysis has been done on the new programme that was not outlined in that consultation process?

How have the local authorities been fulfilling their role in terms of allowing access onto the national primary network? Have we had a significant problem because of local authorities allowing access to the network, maybe so they could have a greater rates base? Have they done a good job in restricting access to the network?

Mr. Tobin

By and large, local authorities have tended to resist the pressure to allow access to developments from the primary network. As I interpret the first part of Deputy Eamon Ryan's question, he is raising the issue of the difference between the programme the NRA would have advanced by way of input to the national development plan and that which finally emerged. We made our input but the Government obviously listened to other bodies that had an interest in the matter. I suspect these bodies included IDA Ireland and perhaps the Chambers of Commerce of Ireland. I do not see it as the role of the NRA to second-guess Government policy. We accept as given the programme of works on national roads that the Government wishes to be delivered and I see it as the role of the authority to deliver that programme, provided it gets the funding.

Deputy Eamon Ryan

Has Mr. Tobin further information on the transport programme the Government came up with in economic terms?

Mr. Tobin

No. Individual projects are subject to economic evaluation as they progress, be it through COBA or otherwise. Information along those lines is presented in each case when each project is analysed in terms of property acquisition by An Bord Pleanála.

Chairman

Some people have commented that in Whitehall, when heading to or from the airport, they cannot see any of the signs.

I thank the delegates for their presentation and for answering questions. It has been great to have them here and I wish them the best of luck in future endeavours concerning roads.

Mr. Tobin

I thank the Chairman.

The joint committee adjourned at 4.45 p.m. until 2.30 p.m. on Wednesday, 19 March 2003.