I welcome Mr. John Martin, chief executive officer, Waterways Ireland. Will he introduce his officials, please?
Waterways Ireland 2007 Accounts.
Mr. John Martin (Chief Executive, Waterways Ireland) called and examined.
Mr. John Martin
I am accompanied by Mr. Brian D'Arcy, director of operations; Mr. Colin Brownsmith, director of finance and personnel; and Mr. Martin Dennany, director of marketing and communications.
I welcome the delegates from Waterways Ireland. I also welcome Mr. Deaglán Ó Briain, principal officer at the Department of Community, Rural and Gaeltacht Affairs.
I must make witnesses aware that they do not enjoy absolute privilege. Attention is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, by name or in such a way as to make him or her identifiable. They also are reminded of the provisions within Standing Order 158 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister, or the merits of the objectives of such policy or policies.
I ask Mr. Buckley to introduce the special report by his office, Accountability of North-South Bodies 1999-2007, dealing with Waterways Ireland.
Mr. John Buckley
Waterways Ireland is one of six Implementation Bodies established under the Belfast Agreement of 1998. Its task is to manage, maintain, develop and restore the inland navigable waterway system. A total of 85% of its current funding comes from this jurisdiction, with the balance being provided by Northern Ireland. Moneys for capital works are provided based on the location of the part of the system being developed. In 2007 Waterways Ireland spent €35.6 million on current expenditure and administered a capital programme of €17.6 million. Its maintenance programme is outlined in its annual report and involves preparing the navigation network for recreational activity each year, including extending the length of waterway that is navigable, refurbishing lock gates, registering vessels and carrying out inspections relating to the use of the facilities. On the capital side, the value of work in progress at 31 December 2007 was €14 million. The overall value of the public investment in the assets administered by Waterways Ireland is approximately €700 million. The headquarters of the body is at Enniskillen, with regional offices at Carrick-on-Shannon, Dublin and Scarriff, as well as other offices throughout the country. The waterways it administers include the Grand and Royal Canals, the Erne system, the Shannon and Barrow navigations, as well as the Lower Bann.
The general basis of accounting for North-South Implementation Bodies and the results of early audits of such bodies are summarised in a report jointly published by the auditors general of both jurisdictions and laid before Dáil Éireann in May 2008. The audit of North-South Implementation Bodies is carried out on a joint basis by the auditors general in both jurisdictions and involves producing a certificate on the accounts and, where necessary, a supplementary report on any accountability issues arising from audit. Qualified opinions were issued on the accounts of Waterways Ireland between 2000 and 2002. This was because of the lack of asset recording by the new agency. In mitigation, the Department which had previously administered the waterways had not undertaken a complete physical inventory for a number of years and the methodology for valuation of these assets had not been addressed at the time of the takeover by the new body. The matter ultimately was rectified by 2003.
Will Mr. Martin make his opening statement?
Mr. John Martin
I am pleased to appear before the committee to discuss matters relating to Waterways Ireland. We are responsible for the management, maintenance, development and restoration of the inland navigable waterways, principally for recreational purposes. We also have responsibility for the marketing and promotion of the waterways. Additionally, we were charged at the outset with taking forward studies of the Ulster Canal. We have responsibility for approximately 1,000 km of waterways, 850 km of which are in Ireland and 150 km in Northern Ireland, which stretch from Belleek to Limerick, from the River Shannon to Dublin and to St. Mullins on the River Barrow, as well as the Lower Bann which flows from Lough Neagh to Coleraine.
We are funded jointly by both jurisdictions, with 85% of our current funding provided by Dáil Éireann and 15% by the Northern Ireland Assembly, which reflects the current distribution of the waterways under our control. Capital development programmes are funded separately by each jurisdiction. As a cross-Border body, we have faced unique opportunities and challenges in performing our functions.
We are organised in four divisions. The operations division manages the waterway system, including capital works, maintenance programmes and implementation of by-laws. It also manages the organisation's property portfolio. We inherited a vast portfolio of property from our predecessors and have been reviewing the many old leases and bringing them up to date. As none of the lands was registered, we have commenced a pilot study of the registration of our property.
Our technical services division provides civil and structural engineering design services and a project management service for large capital projects. It also provides services in mechanical engineering, environmental advice, asset and project management and health and safety. The division has overseen the design and project management of the Royal Canal bridges and is currently designing projects for extensions of navigation to Dowra and Glasson under the national development plan, as well as project managing the project to reopen the Ulster Canal to Clones which was approved by the North-South Ministerial Council meeting in plenary session in July 2007.
The finance and personnel division provides all of the support services in finance, human resources, information technology, policy development, equality matters, corporate and business planning, training and development, accommodation and house services. The division also leads on corporate governance within the body. Risk management is embedded in the organisation and high level reports are provided quarterly for the management committee, the audit committee and the sponsor Departments. We have just completed a computerised risk management system which we will be introducing across the organisation this year.
The marketing and communications division manages internal and external communications, the press office, public relations, visitor services, marketing initiatives, our sponsorship programme, publications, archives and event management. We have continued with our marketing and promotional campaigns and ran a very successful sponsorship programme for 2008 that sponsored some 50 events throughout the waterway system. We are involved with a range of partners in a high profile lakelands and inland waterways initiative extending from Belleek to Limerick.
Our new headquarters in Enniskillen was opened on 16 January by Ministers Campbell and Ó Cuív. We have three regional offices in Dublin, Scarriff and Carrick-on-Shannon, as well as a number of other offices and depots along the waterways, the main ones being in Portumna and Tullamore.
I consider that we have strong external controls in place. Our programmes are controlled by having in place longer term three-year corporate plans, as well as individual yearly business plans, which are approved by the North-South Ministerial Council. I monitor progress against these business plans on a monthly basis and report on progress monthly to a monitoring committee which comprises representatives from both sponsor Departments and senior management of Waterways Ireland. In addition, a finance sub-committee of this group meets bi-monthly to review in detail aspects of financial performance. On a regular basis I report to Ministers in the North-South Ministerial Council on progress against our approved business plans and other matters relating to the management of the body. The guidelines for operation of the body are set out in the financial memorandum which has been agreed by both jurisdictions and our annual report and accounts are examined by both Comptroller and Auditors General.
To satisfy myself regarding the internal controls of the body, I have established a management committee, an internal audit committee with two external members, an internal audit section, detailed internal delegations with strict financial limits, robust financial systems, a risk management system and a project management system. I also have put in place a number of internal groups to ensure the smooth running of the organisation, for example, a partnership committee, a health and safety committee and an industrial relations forum in which we meet regularly the unions to discuss overarching industrial relations issues. In addition, we also have regular meetings with individual unions to deal with specific matters.
Our internal audit system is based on regular audits carried out by our own internal audit team led by a chartered accountant who is well experienced as an auditor. Subjects chosen for audit are based on our risk assessment process to ensure the correct focus of activity is achieved. Where considered appropriate, external experts are used as part of the internal audit process. Both three-year and annual audit plans are developed and approved by the audit committee. The audit committee regularly reviews the achievement of the recommendations arising from past audits. At the end of 2008 over 97% of audit recommendations to date had either been completed or were in the process of being implemented.
In the report of the Comptroller and Auditors General, Accountability of North-South Bodies 1999–2007, before members two matters are raised, namely, fixed assets and project management. I inform the committee that both matters have been addressed. The Comptroller and Auditor General has noted that Waterways Ireland did prepare a satisfactory asset register and has been given unqualified opinions in the financial statements for 2003 and later years. For the 2007 accounts, the value of these assets was almost €680 million.
As for project management, the report notes that a new project management system was being piloted in 2006. We have since introduced this seven-step project management process from conception phase to post-project evaluation. It is being applied to all our new capital projects under the national development plan. I will provide further details on our system if the committee wishes. We would be happy to answer any questions that members might have.
I thank Mr. Martin. May we publish the statement?
Mr. John Martin
Yes.
I thank Mr. Martin and his officials for attending. I want to follow up on a note that the committee received from Mr. Paul Maskey, MLA, chairman of the Northern Ireland Assembly's public accounts committee, before which our guests appeared on 12 March, concerning the general issue of governance. He stated that, in some cases, North-South bodies had non-executive boards. Since this is a matter for legislation and policy, Mr. Martin cannot comment, but what is his personal opinion? As the Accounting Officer, everything seems to be on his shoulders. That is fine as I am sure that they are good, strong shoulders. However, an external board might be better for corporate governance in an organisation of such activity. Has Mr. Martin a personal opinion in this regard or does he take the situation as it is?
What is the reporting structure? Is Mr. Martin akin to a Secretary General in a Department reporting to a Minister? The Office of Public Works, from which Waterways Ireland inherited much of its property, has a board of commissioners, as do the Revenue Commissioners. In neither case is the board external, but Mr. Martin seems to be like a Secretary General. Am I understanding the structure properly?
Mr. John Martin
Yes. When the cross-Border bodies were set up, three of the six Implementation Bodies had executive boards, Safefood had an advisory board and the others, the Special EU Programmes Body and Waterways Ireland, had no boards. Under the legislation, we are a corporate organisation with a chief executive. This is what we work with because it is what we have. I am not in a position to comment. Through a monitoring committee, we report to the two sponsoring Departments and I report at North-South Ministerial Council meetings to the Ministers acting jointly.
We have very strong governance in place and the procedure works well, but I am not in a position to comment. As I have never worked with a board, I am not in a position to give a personal opinion on whether working with one would be a good or bad thing.
That is fair enough. For public information, I wanted to highlight the differences between the bodies. People may not be aware of it. The structure in place is a policy issue for the relevant Minister.
I did not want to say it.
I will say it for the Chairman. Towards the end of Mr. Martin's statement, he said Waterways Ireland had introduced a "seven-step project management process from conception phase to post-project evaluation" in respect of projects under the national development plan.
I will cite the notes that I studied for the meeting and that I assume came from our guests. There is a reference to Lyneen Bridge? Where is that?
Mr. John Martin
It is on the Royal Canal.
In which county?
Mr. John Martin
County Longford.
According to the notes, planning permission was received for Lyneen Bridge. However, following a tender process, the cost of the bridge as a lifting bridge was considered excessive and Waterways Ireland decided to redesign it as a fixed bridge. The commission for the redesign was let and a revised design is being prepared. Will Mr. Martin update the committee? After nearly bringing the project to tender stage, what costs would have made it too expensive? Did Waterways Ireland follow compulsory purchase order processes or does it have that power? What are the costs and the current situation?
Mr. John Martin
I do not have the exact cost of the lifting bridge. We had already built a lifting bridge further down the road at a reasonable price. When we put the Lyneen project, which was a similar bridge, out to tender, the cost was far above our engineering staff's estimates. In light of construction costs of which we were aware at other locations, we were of the opinion that the cost was high.
We discussed the matter with the council. The lifting bridge related to the question of the roads that were coming in from all directions. We got the council's agreement that certain road modifications could be made. When we put a fixed bridge project out to tender, the price was substantially less than the original tender. The fixed bridge has been built, was opened to traffic in the past week and water is flowing under it again.
I did not know that.
Mr. John Martin
Many roads needed to be closed and so on, but locals are happy with the job that we have done.
If the current arrangement is satisfactory, was the original plan for a lifting bridge too ambitious? What are the shortfalls of not having a lifting bridge?
Mr. John Martin
A lifting bridge is normally at road level and must be lifted to allow boats through. As the Royal Canal is not yet open, no boats are moving in that section. There will be a certain disruption on the roads.
Will it restrict any boats Mr. Martin would have liked not to have been restricted?
Mr. John Martin
No. The bridge uses a very modern, upmarket system based on breaking laser beams. When a boat breaks the beams, the lights wait for the road barriers to fall. The bridge takes a couple of minutes to lift, the boat passes through and the bridge drops. It is not on a national primary road.
I am more concerned about the waterway traffic. Mr. Martin should worry about his area. We will ask the council about the roads.
Mr. John Martin
It will not impinge much on people boating, which is done at 4 km/h, which is walking pace. If a lifting bridge is three miles up the canal, it will take a boat an hour to get there. Waiting ten minutes will not worry people.
Will our guests send the committee a note on the cost aspect of the project with which they did not proceed?
Mr. John Martin
We will on the original estimate.
I am pleased to see the good side in that someone in the system said "No" at some point. Traditionally, if costs escalated, everyone ploughed ahead and there was no shortage of money.
Mr. John Martin
A fixed bridge satisfies everyone, including our navigation, and there is no risk of anything breaking down.
Deputy Fleming also asked about compulsory purchase order powers. We have the power to purchase land compulsorily for all our bridges, but it is approved by the Ministers at the North-South Ministerial Council. We put together a set of proposals that are approved at the council and implemented.
Is it similar to the process that local authorities use?
Mr. John Martin
We have the same powers as the Commissioners of Public Works. We purchase with the agreement of the landowner, but a CPO allows the registration of land to be done more easily than would a normal purchase. We get the land, but we agree the amount with the people involved in advance of a CPO.
According to one of the notes, most of the properties are not registered.
Mr. John Martin
Yes.
The CPO process must be difficult if some of the lands around the bridges are not registered.
Mr. John Martin
We CPO everybody's lands.
Including our guests' own.
Mr. John Martin
We keep our own land.
Waterways Ireland presumes that it owns the rest of it.
Mr. John Martin
Yes.
In the annual report, which was interesting, I was impressed by the sections on environmental work. Waterways Ireland deals with many candidates for the status of special area of conservation. There are a number of protected species.
Mr. John Martin
Yes. The two canals are national heritage areas, NHAs. The Shannon is another special area of conservation.
Yes. I note the Barrow navigation process on page 11. To streamline the consultation and approval process, the term "appropriate assessment" is used in respect of the impacts of the planned work programmes on the various species and habitats under the habitats directive. What is this appropriate assessment? Was it short or a special process?
Mr. John Martin
It depends. We must assess every piece of dredging we do. We must examine everything we do. A juvenile lamprey turned up in the Barrow and we had to examine that and in Dowra we had to deal with pollen. We have a unit of four or five people who assess this for us. If we must bring in external people, such as Shannon Regional Fisheries Board for the assessment of the pollen in the north Shannon, it is because they have external expertise we do not have. We examine each project, consider how big it is, and bring in experts if needed.
Is Waterways Ireland a planning authority or must it apply to a local authority for planning?
Mr. John Martin
Waterways Ireland is not a planning authority.
Must Waterways Ireland apply for planning permission in the normal way?
Mr. John Martin
Yes.
Are any Waterways Ireland projects appealed to An Bord Pleanála?
Mr. John Martin
No.
Is that a regular feature?
Mr. John Martin
Most of our capital projects are set out in the national development plan, so everyone is aware of them. We have recently had the extension of navigation from Lough Allen towards Dowra appealed to An Bord Pleanála, which upheld the appeal on three conditions. One related to environmental reasons.
Did it grant permission?
Mr. John Martin
No, the council granted permission but An Bord Pleanála turned it down on three grounds; one relating to the road between Dowra and the location, one relating to the local authority's plans and the third concerning environmental issues.
If there are such internal experts, why can Waterways Ireland not get its projects through An Bord Pleanála?
Mr. John Martin
Of the three grounds I mentioned, one related to environmental matters and in that three items, out of hundreds, were discussed. One of these concerned zebra mussels.
That is why I originally started talking about protected species. Mr. Martin has referred to one.
Mr. John Martin
I am not sure whether the zebra mussel is defined as a protected species. In fact, it is a most invasive species that came in through Limerick some ten or 15 years ago and spread through the Shannon and other places. The one place it has not survived in is Lough Allen. That was one of the matters referred to when we were turned down.
Were other projects refused by An Bord Pleanála?
Mr. John Martin
That is the only one.
I presume Waterways Ireland can examine the inspector's report for An Bord Pleanála.
Mr. John Martin
We have done so.
Will Waterways Ireland see if it can mitigate the issues?
Mr. John Martin
We have reassessed the environmental issues and we will be in a position to return to the planning process in the next few months. The council has addressed the roads issue and has upgraded the road sufficiently. It has also revised its development plans. We are working with the council with a view to resubmitting planning later this year.
I refer to page 55 of the accounts, which states that insurance and legal fees were €529,221. The figure is also provided in sterling. Is there a difference in insurance claims north and south of the Border? Does Waterways Ireland meet claims out of its resources? Does it have public liability insurance on all its assets or does it meet claims out of its current funds?
Mr. John Martin
We meet funds out of our resources in the South in line with normal insurance and our financial memorandum. In the North, we have insurance for liability. We have considerable insurance fees. For example, we have many vehicles. We spend more than €73,000 on vehicles. We pay public and liability insurance of more than €30,000 just in the North, where we have ten individuals on operations. To translate insurance premia to the South, we estimate it could amount to €300,000-€400,000 per year. We carry our own insurance for injuries.
How much did Waterways Ireland pay in claims in the year under consideration?
Mr. John Martin
In legal claims and settlements we have paid out some €78,000.
Is that in 2007?
Mr. John Martin
Yes, we have also paid out for claims for tribunals we had to attend and legal advice on our property management. We have many leases and CPOs. We have spent more than €100,000 on legal fees for flooding claims, licences, lease fees and so on. We have ownership of a major amount of land. We have 3,000-4,000 leases brought in from CIE and we are updating these. Getting these sorted out is very expensive but it must be done.
Has Waterways Ireland taken ownership of the bridges for railway purposes over the canals?
Mr. John Martin
No, not the railway bridges. We have full ownership of 300 of 500 bridges. Some of the rest have been given to local authorities but CIE owns the railway bridges.
There is reference to contingent liabilities in the accounts. I wanted to ask about the different experiences on insurance issues, which are quite different north and south of the Border.
Mr. John Martin
We are now assessing the issue of whether we should go for full insurance in the South. It could be more expensive to do this over a long period.
Waterways Ireland will weigh it up. Regarding the work carried out on different projects, expenditure on the Grand Canal and the Barrow navigation decreased by 24% and 23% in 2007 compared to previous years. Why is there a reduction? It seems that this applies to maintenance — on page 54. Costs are broken down by programme and then by waterway.
Mr. John Martin
It varies from year to year. I will address this in general rather than specifically. For example, if we have heavy weed growth in the canal, which may occur in some years depending on heat and light, one can spend much more money on cutting weeds, grass and trees. This year we had the fleadh in Tullamore and we spent money maintaining this area and ensuring boats could get into Tullamore. In other years there may be demands elsewhere. We had bad weeds in Lough Erne four years ago. We now have top class machinery but we have not had the weeds for the past couple of years. It is weather dependent — I cannot say anymore about it.
Is there a category in the national tidy towns competition for canals or harbours?
Mr. John Martin
In the past three years, we have won prizes in the local authority management awards. Two years ago we won an award in Carrick-on-Shannon when Leitrim County Council nominated us and last year Boyle Town Council nominated us and we received an award for the best harbour.
I compliment Waterways Ireland on that.
I wish to raise the matter of the fixed assets in the accounts. There are approximately €700 million worth of assets which are mainly canals, locks, bridges and fixed moorings. In the accounts there is an addition to the fixed assets in the year under question of €3.6 million and this is fine. We have been provided with a breakdown of expenditure on the waterway systems in the profit and loss account. Can we be provided with a breakdown on which waterways schemes involved this addition to fixed assets? If the information is not to hand it can be forwarded to us. We have it in one part of the accounts but we do not have a geographical breakdown.
Mr. John Martin
We have set out the works we have done on an annual basis. The addition to the fixed assets are those which have been completed and which have been capitalised within the year. Mostly, it involves works done in the previous year. I can state that Begnagh Bridge in Longford accounts for €2.3 million.
This is the biggest item.
Mr. John Martin
It was capitalised and added to the accounts. Millions were spent on works in Ringsend on the Grand Canal Docks and this was capitalised and put into the accounts as capital items. A number of smaller items for €200 or €300 are also included.
I understand.
Mr. John Martin
Does the Deputy want me to send on the information?
No, the large items have been explained and obviously it varies from year to year. In page 49 of the accounts under the heading "Fixed Assets", it states, "Waterways Ireland capitalise items with a useful economic life of over one year and with a value in excess of €1,000." How is a distinction made between what is maintenance and what should be capitalised?
Mr. John Martin
The basic rule is that if the lifetime of an item is more than one year we will turn it into capital. With regard to depreciation, we have depreciated canals over 500 years. Works on a jetty is a capital item and capitalised into the accounts.
Chapter 4 of the annual report, entitled "Developing and Restoring the Waterways Network", mentions the realignment of culverts on the Grand Canal and dredging completed near Vicarstown in County Laois. It also mentions towpath surfacing and overhead lighting near Davitt Road on the Grand Canal and footpaths, the introduction of new overhead lighting and the placing of services underground. Perhaps Mr. Buckley will answer my next question. Waterways Ireland has a policy of writing off fixed assets over a 500 year period.
Mr. John Martin
Some of them.
Which assets are written-off?
Mr. John Martin
The actual canal infrastructure. Building the Royal Canal began in 1757 and it was finished in 1806 approximately so already it is 200 years old and it is still in working condition. Page 59 of the report explains how we write off the depreciation.
Yes.
Mr. John Martin
We write off our major capital works, namely, structures, locks and bridges at 0.2%.
And fixed moorings.
Mr. John Martin
Yes.
What are fixed moorings?
Mr. John Martin
A fixed mooring is one which is built out of concrete. They are the big solid moorings which we have on the Shannon and along the canals. Floating moorings have a 25 year life after which they must be reviewed and regenerated. Timber moorings also have a limited life. Some moorings on the Shannon have been there for well over 100 years.
Are they good for another 400 years?
Mr. John Martin
As long as they are well maintained. At present, the lock at Ardnacrusha is being renewed by the ESB. It is almost 90 years old and with a bit of luck it will be there for another 300 or 400 years.
I am curious to know where in the balance sheet are items such as lighting and footpaths? Are they included in the 500 year depreciation? In the accounts they are included in capital assets under operational and non-operational heritage assets.
Mr. John Martin
We will have to examine this specific item and get back to the Deputy. The major valuations in structural items come from the replacing of the canal and 500 bridges. In relative terms, they represent serious money in terms of depreciation and valuation relative to our accounts. While the value of the replacement of all our material is depreciated at €700 million, at present replacement would cost well over €1 billion. These go in as minor items and we will check the exact details.
Mr. Buckley heard the gist of the question I asked about the 500 year write-off period for capital assets. I know the audit is in line with international standards. The questions I asked refer to capital inclusions in the annual report. I have no way of knowing whether lights and footpaths are not being written off over 500 years. Is the Comptroller and Auditor General satisfied with this?
Mr. John Buckley
Obviously we examined it and much of the guidance on this is being driven from the Northern side and the rules of UK governance. One must bear in mind that the valuations for the bulk of these assets are valuations at a point in time. They were decided on to capture a value for the infrastructure in use. In our report of 2000 the issues both audit offices had with Waterways Ireland was that no valuation was put on the assets and we did not know what were the assets because there was no inventory. Nobody knew the true cost of these assets so the process from that point was to establish what assets exist and put a valuation on them.
There is no way to have an historic cost going back hundreds of years so what had to be done was to put a valuation on categories of assets and bring into the accounts a depreciation figure based on this which would give a value of what is being consumed in the business on a yearly basis. This is what depreciation does. As the chief executive stated, the vast bulk of the capitalised expenditure, or the valuation put on assets, is with regard to heritage type assets which have a very long life. When discussing tourism earlier we could have spoken about Bunratty Castle. These assets have existed for thousands of years. Deputy Fleming and I are accountants and in one sense, one would probably state that they should be written off over 100 years. However, in another sense they are priceless and usually once they are maintained they are carried in the balance sheets of State bodies at a valuation.
I understand this. One establishes an asset register and places valuations. I am reading the 2007 account, which refers to additions during the year and I read out various items from the Waterways Ireland report. I would like to be sure. Mr. Martin can send me a note to show they are not being put in with these other, larger assets at a 500 year depreciation. It is not clear to me from the accounts. If somebody can answer, that is fine. Otherwise they can send the committee a note.
Waterways Ireland can forward a note.
Mr. John Martin
Perhaps my director of finance might like to mention exactly——
The delegation can send us a note.
That is fine.
I would like to ask some questions, one on Waterways Ireland's relationship with the Dublin Docklands Development Authority, DDDA. Could Mr. Martin give us more detail on the 1.2 hectare plot of land, No. 8, it was hoping to develop there? We do not have the Department of Finance here today, but in its 2007 report Waterways Ireland mentioned that the Departments of Finance and Community, Rural and Gaeltacht Affairs were monitoring the issue. Could we be updated on that?
Mr. John Martin
We own the freehold of a plot of land but Bord Gáis, which was there years ago, had a 99 year lease from 1964 on it. As the DDDA took over the lands from Bord Gáis it took over the various responsibilities of Bord Gáis. The site is in a triangle of land approximately 1.2 hectares in size between the Dodder and the Grand Canal Basin. We discussed it with the Department and the land seemed to have a very good opportunity for development. It was agreed with the DDDA that we would get involved in the development, it would project manage it for us and a portion of the profit from the development would be allocated——
Does the DDDA own it?
Mr. John Martin
We own the freehold but under the legislation the DDDA has rights over part of it for 100 years. The legal advice is that it would have the right to extend that right for another 100 years. Although we are the freeholders, we would not have been able to do anything without its agreement.
The DDDA is a relatively new organisation.
Mr. John Martin
It is; it was Bord Gáis before that.
How did it acquire its rights?
Mr. John Martin
It took over the leasehold on quite a number of properties from Bord Gáis. It is within its area of responsibility, the same way it got property from CIE and other organisations. We got into discussions with the DDDA and decided we would take the opportunity for a design and build of offices cum apartments with something in it for us. Whatever came out of it was to be split 60% for us and 40% for the DDDA. We put together the documentation and got approval from our Department and Minister to go ahead along those lines. We have not gone ahead. We came to a certain stage, but the board of the DDDA did not recommend moving at this time. We have to watch the market and see what is happening in this area because we are in very uncertain times. The legal agreement is still in place but it would not be reasonable to enter the marketplace at this moment.
Aside from the 60% of the profits Waterways Ireland would get, what facilities were the organisation to receive?
Mr. John Martin
Initially we were to get an up-front payment from the developer selected and a new boat slipway and hard standing and a new depot of approximately 1,000 sq. m for our people, we were upgrading and reinstating walkways along the area, there was to be a car park, the lock gates were part of the development and were to be upgraded, one graving dock was to be a working dock and one to be a water feature and additional accommodation for dockmasters was to be provided. There was an agreement on offsetting between us and the DDDA because it also required items to be done. It is static now.
Did Mr. Martin say there was an agreement with a developer?
Mr. John Martin
No, an agreement was in place with the DDDA. We were planning to go out last Christmas to a major design and construct tender because we would not have the ability to project manage that.
Is it on ice now?
Mr. John Martin
It was to be considered recently by the DDDA board but nothing has happened yet.
Regarding methods of payment by users of the waterways, is there is a smart card operation in place in parts of it or how is payment made?
Mr. John Martin
We have three different systems in place. One has come from CIE's times on the canals whereby one can make an individual payment to go through a lock, pay monthly or buy an annual permit for €125. On the Shannon where the big locks take up to eight to ten boats, one pays individually €1.50 each time one goes through a lock. On the Shannon-Erne waterway, which is the most modern one built before we came into existence, there is a smart card system where one buys a smart card, gets out of one's boat, puts it into a console and presses the buttons. One person can work that and it is automatic. The smart cards also work on the pump-outs and service blocks we have built.
My final question is on safety on the waterways. As there are limitations on how much one can drink before driving on roads, are there rules on alcohol consumption on the waterways and does it come into the safety equation?
Mr. John Martin
There are by-laws on navigation that specify how one manages on the waterways. One is not allowed to be in charge of a vessel if one is under the influence of alcohol. That is the way to look at it. The police manage any public order offences. We do not manage them.
Is there any monitoring of the intoxicating liquor situation on the waterways or is it just a meaningless by-law?
Mr. John Martin
If the Chairman agrees I will ask my colleague Mr. Brian D'Arcy to respond.
Mr. Brian D’Arcy
Mr. Martin has stated that there is a by-law that prohibits somebody from operating a vessel when under the influence of alcohol or drugs, however we do not have the powers the Garda Síochána has to measure that intoxication and we do not have powers of arrest under that type of legislation. It goes back to what we consider public order. If members of our inspectorate, who enforce the by-laws, consider somebody a danger due to alcohol, drugs or careless boating, they would immediately address the situation if it were brought to their attention. They generally do this through education more than anything else. They would advise people who were displaying signs of drunkenness not to continue on their journey. That generally works. The enforcement of the by-laws has generally been more by education than coercion and that has worked reasonably well.
Is that the same in both jurisdictions?
Mr. Brian D’Arcy
Yes, the same attitude is taken in both jurisdictions.
It seems to be more of a pious aspiration than an enforceable regulation.
Mr. Brian D’Arcy
It would be very difficult for us under the present regulations to enforce it in a by-law situation. We do not have those powers and by-laws are not written in such a way that we can measure the intoxication. The experience has been, although the Deputy is quite right in what he has said, that it has proved to be very successful. The incidence we have of unruly behaviour on the navigations is quite limited with regard to intoxication.
I know there are certain aspects of craft using the navigations which have a very bad press. With regard to general boating, people come to our navigations to enjoy themselves and having a drink or two is part of that. Historically, it has not proven to be a major issue for us. In considering cases of death or injury, it could not be compared with the roads.
Are there any powers in the event of an accident?
Mr. Brian D’Arcy
We have certain powers under by-laws. Those powers would be augmented by the Marine Casualty Investigation Board procedures as well. We have not been in the habit of prosecutions because the incidence is relatively small. We have very few incidents.
The organisation has a spend in 2007 of slightly in excess of €53 million, with €47 million coming from both the Republic and Northern Ireland. What type of income is being received every year from the usage of the waterways?
Mr. John Martin
We get about €500,000 per year from every source. The accounts show the operating income at approximately €238,000, with property related income at approximately €90,000. If the operating income is divided roughly, from the permits on the canals we get approximately €50,000 to €60,000; what we get on the Shannon is approximately €100,000 to €125,000 and we get another €20,000 or €30,000. These are very rough figures. The approximate €240,000 mostly comes from the tolls on the Shannon and the canals and the smart cards on the Shannon-Erne waterway. We have some income from leases and other items which are also listed.
It is minimal in the sense of the overall budget. The canals are used for leisure reasons as well. I am leading to the issue of usage. What levels of usage do the canals have and how is this monitored by Waterways Ireland? With regard to the major capital projects undertaken to improve the canals and waterways, what increase is envisaged in usage — I would imagine mostly in the leisure sector — and how would that be tracked?
Mr. John Martin
We measure the number of boats by means of a registration system which takes in navigation issues. The number of boats on the waterways have gone from approximately 5,000 when we came into being to 12,000. Another 1,000 boats went on the waterways in 2008, which is an indication of the navigations.
We have been upgrading tow paths around the country, especially along the canals and by far and away the biggest activities on our canals are walking and fishing. One of the British magazines dealing with fishing has recently stated that the canals in Ireland are the best in Europe for fishing. As we own the canals, the Central Fisheries Board stocks the canals for us. There are fishing competitions right along the canals. The Deputy may have seen in the papers two or three weeks ago where one section of the canal had to be closed for works and the fisheries board took 25,000 fish from that stretch. We see fishing and walking along canals in an urban environment as being the big activities.
I agree that there is far more to the issue than just the boating aspects. Usage of the canals is important for the Exchequer and the continued investment in them. I am glad to hear there has been a sizable increase in boating.
I want to get to the interaction with the tourism bodies, Fáilte Ireland and Tourism Ireland, which were in attendance earlier. How does Waterways Ireland interact with them, as I am sure it does, and how effectively is that being done? Is there any way to monitor visitors, whether Irish or from abroad, with regard to holidaying on our waterways? I know that may be difficult.
Mr. John Martin
Those dealing in boat rental monitor where their customers are from.
Mr. John Martin
German-speaking tourists were the biggest group for many years. With regard to our interaction with Fáilte Ireland and Tourism Ireland, we have become involved in what we term the lakeland and inland waterways initiative, which runs from Beleek in Fermanagh to Limerick and up to 30 miles either side of the waterway, and we are putting up funding for that. Fáilte Ireland and Shannon Development are also putting up funding and Fermanagh Council is involved along with the Northern Ireland Tourist Board.
How are we doing with that?
Mr. John Martin
That has gone out to the public domain. We believe it is an excellent initiative as the waterways have gone from being a backwater, if one wants to put it that way, to being a super-region within Fáilte Ireland's remit. We are promoting them abroad as well as Waterways Ireland. We have set up a website in the past two years and we have had 9 million hits on it in the past year. There were more than 1 million hits in July of last year. The audience has gone up by 30% or 40% each year in the years it has been going. That is a measure of the interest of people in the waterways and Waterways Ireland.
Deputy O'Brien highlighted the difference between the body's income and expenditure. Income from the Departments is €47.5 million, with expenditure of €53.2 million. There is very little from the public, so where does the balance come from?
Mr. John Martin
Under our financial memorandum we get 100% of funding for capital works, with each jurisdiction paying as is relevant. All our current works, such as maintenance and staffing, is paid on an 85-15 basis by the two jurisdictions to reflect the waterways. We have 850 km in the South and there are 150 km in the North.
Under our financial memorandum we are allowed to keep any income we get, which amounts to approximately €500,000 per year between everything. The only other opportunity we had for big income was Plot 8 in Dublin, where we saw an opportunity. Other than that, we would have to consider how we would get extra money as we were not given a commercial remit when we started. When Waterways Ireland was set up it was made very clear that it was to manage, maintain, develop and restore the inland navigable waterways principally for recreation purposes. We firmly believe we are carrying out that remit. We are not a commercial organisation.
Governments over time have made decisions on investing in inland waterways from the time they took the canals into the Commissioners of Public Works and reopened the Shannon-Erne waterway. Those decisions were made at a political level and we implemented whatever we had to. We are in the same position currently. For example, a decision has been made to move with the Ulster Canal and Waterways Ireland has been given the remit to project manage the first section from Lough Erne to Clones. We will do that as well. The only way to get more money would be the addition of massive charges. To try to get €50 million a year from 10,000 boats would mean looking for €5,000 a year from each boat. It would kill the whole thing.
I understand. From the annual accounts, it can be seen that the figure for contracted-in services doubled from 2006 to 2007, probably for a very good reason. Could Mr. Martin give the committee an outline of the types of service involved?
Mr. John Martin
Contracted-in services are under two headings in the accounts. One is programme costs and the other is other operating costs. I can give a breakdown of whichever one the Deputy is interested in.
I am interested in programme costs.
Mr. John Martin
Contracted-in services represents a figure of €1.5 million. First, we engaged a major company to carry out bridge inspections. We have 500 bridges across canals, some of which have been there for many years. We decided that from a safety point of view we would do a major inspection of every single bridge and put them on a GIS system for management. That cost €570,000. We have a contract with the Central Fisheries Board for fish stocking, dealing with the water framework directive, advice and water monitoring, which is for more than €400,000. The board is the only body with the right to touch and move fish, so we have no choice. We then contracted a firm to design the bridge in Portumna, which had to be rebuilt over a very short time as the moving part was coming close to failure. The firm cost us €127,000.
Were all these services engaged through a tendering process?
Mr. John Martin
Absolutely. We use the public procurement website. I can go on if the Deputy wishes.
No, I just wanted an idea of the types of service used.
Mr. John Martin
What we have is €1.1 million of the——
I can understand that for individual projects such as those one would have to go outside the agency.
Unfortunately we have another delegation coming in from the Broadcasting Commission of Ireland and we are over time. We will have two more short questions.
I was in the Dáil earlier, so if this question has already been asked I will wait and read the reply. Over the period in question, what liability was incurred with regard to unfair employment practices or bullying at work?
Mr. John Martin
An individual made a whole series of claims against me and other people in Waterways Ireland, and these were investigated by the relevant Departments. The outcome has been put on the record of the Dáil and was contained in a press release issued by the Departments. The individual returned to his own Department and took a claim to a tribunal. Given the massive costs involved, we agreed, on the recommendation of our QC, to settle. We settled for £50,000 sterling.
What was that for?
Mr. John Martin
The person took a case for unfair dismissal and the fact that he had lost money because he said he had not taken up a post which we had withdrawn. We ended up paying that amount on the recommendation of our QC because otherwise the costs would have been a multiple of that. It was estimated the tribunal would run for three weeks with costs running at £5,000 to £6,000 a day, plus a settlement, if there was one, at the end. We took the advice of the QC and settled. The individual, for other reasons, is now taking a case in the High Court in Belfast against the Department of Culture, Arts and Leisure and Waterways Ireland in which judgment is due quite soon. Based on the limited liability as outlined by the Chairman, I would prefer to say no more.
I know. I do not want to know the answer to that. Was that the entire cost?
Mr. John Martin
No. There were legal fees of about £70,000. We had to pay our own legal fees. We did not have to pay any of the individual's legal fees nor was there any admission of responsibility. The total legal costs for the tribunal came to slightly in excess of €100,000. That was before the settlement.
Could Mr. Martin send the committee a note on any properties belonging to Waterways Ireland that are lying idle or derelict? He might refer specifically to the large properties at Percy Place and Lennox Street in Dublin.
Mr. John Martin
We have two buildings, one an old house in Lennox Street and the other an old lock-house on Percy Place, which one may see if one walks down along the canal.
Can Mr. Martin give the committee a note on those two?
Mr. John Martin
They have been valued. We will send a note on the valuations of those buildings.
And the intentions regarding their use. Just an information note.
Mr. John Martin
Yes, we will do so.
There was another property, the Marine House in Clanwilliam Place, which was lying idle. Is that correct?
Mr. John Martin
No, that is not ours.
No.
Mr. John Martin
Not at the moment.
My apologies. I thank the witnesses for their attendance at the committee and their comprehensive responses to members' questions. I propose that we note the Vote. Is that agreed? Agreed.
I thank the witnesses for all the work they are doing. Waterways Ireland took over a system that was in an appalling state after centuries of neglect. Its staff members are doing an excellent job and I commend them on the quality of their work and the wonderful facility they offer people almost free of charge.
Mr. John Martin
I thank my own staff for that work and I will pass on the Chairman's thanks and good wishes.
It is rare enough that witnesses depart this chamber with the compliments of the Committee of Public Accounts ringing in their ears.
Mr. Martin Dennany
We will wear it with pride.
We all know the songs about the Grand Canal and "What Will We Do with the Drunken Sailor", but we said we would refrain.
Mr. John Martin
Maybe in three years' time when I retire, but not now, please.
We will take a two-minute break and recommence with the Broadcasting Commission of Ireland.
The witnesses withdrew.
Sitting suspended at 12.50 p.m. and resumed at 12.55 p.m.