Dáil Éireann debate -
Wednesday, 27 Nov 2002

Vol. 558 No. 2

National Development Finance Agency Bill, 2002: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Howlin:

I am glad to have a short period of time to speak about the National Development Finance Agency Bill, 2002. It is incumbent on Members, when a proposal comes before the House to establish a quango of the nature provided for in this Bill, to examine it carefully. This is particularly true at this time of financial difficulty, when important social programmes are being investigated, raided and wiped out and when grants to vulnerable people are being withdrawn. The Government has wielded the axe on all sorts of public expenditure and decried the notion of over-administration as one of the failings of our system. Bearing that in mind, why has it proposed to establish a new agency to borrow money to ensure that the national development plan is put in place? This task could readily and properly be done by the National Treasury Management Agency.

The national development finance agency, which is being established in this Bill, was devised during the general election campaign with the notion of keeping accounts off the balance sheet. It was designed to allow the Minister for Finance, when presenting himself to the electorate, to pretend that money borrowed by the agency did not constitute State borrowing. That particular wheeze has been found out by the European Commission and the Minister's justification of it, if it was ever more than a political fig leaf, no longer exists. The national development finance agency will be slotted somewhere between agencies like the National Treasury Management Agency, the National Roads Authority, which looks after the provision of finance for our roads, and the Railway Procurement Agency, which deals with procurement necessary for the development of the rail system.

Why is this going to happen? As I have said, the only reasons I can think of are that the Government is determined to pursue the matter as a consequence of floating the notion in the context of the general election campaign, as well as to pretend the balance sheet is something other than it is. A new raft of individuals, doubtless all well paid, will involve themselves in a new quango to duplicate work that could readily and more properly be done by the National Treasury Management Agency. I do not see any need for this new body. If there is a real determination on the part of the Government to reduce quangos and the level of public administration, I am entirely baffled by the notion of setting up an agency that is patently unnecessary.

I want to mention deficiencies that clearly exist in relation to the infrastructure that it is proposed will be provided by the new agency. I want to mention in particular the investment programme to upgrade the rail service, as outlined by the Minister for Public Enterprise in the previous Administration, responsibility for which has been handed to the Minister for Transport. With the advent of a new Department of Transport, I had hoped that a joined-up approach to public transport would commence. I am glad the Minister of State, Deputy O'Dea, is here to hear me speak about the scandalous suggestion of closing the rail line between Limerick Junction – which is not in his county but is close enough to his home base – to the Europort at Rosslare, at a saving of some €2 million or €3 million. That closure will cost tens of millions in its effect upon the infrastructure of the south-east and the development potential of areas across the south. At the moment 160,000 tonnes of sugar beet is ferried, during the three months of the sugar beet season, from the beet depot at Wellingtonbridge, south Wexford, to Mallow sugar factory. Should this line be closed for want of €2 million or €3 million? That 160,000 tonnes of beet will be decanted on to our road system, which is already collapsing, causing further congestion in every town between south Wexford and Mallow, particularly New Ross and Waterford. The economic costs beggar belief. One hundred trucks a day in each direction will be needed to carry the beet, and this is only one type of freight.

If we are to have joined-up thinking by the Government and this agency is to consider the national development plan in the round, surely arbitrary decisions made by individual agencies such as Iarnród Éireann cannot be tolerated. They can have devastating economic consequences not only for communities but for entire regions. It is nonsense. The Minister for Finance should argue for joined-up thinking and ensure that silly decisions such as this are simply thrown out by Government. This important and pivotal rail link should be maintained.

Today New Ross District Court adjourned because the courthouse is in such dreadful condition with dry rot that it was deemed unsafe.

Minister of State at the Department of Health and Children (Mr. Callely):

That was yesterday.

Mr. Howlin:

According to the news, it was today.

Mr. Durkan:

It will be another place tomorrow.

Mr. Howlin:

It was inspected by an official of Wexford County Council and deemed to be in such bad repair that it could not be used. The courts of the land could not sit in a designated courthouse in an important town. I have given just two of the many glaring examples of the infrastructural deficiencies of this State. We have a national development plan, although I would have argued for different priorities. We need a mechanism to put the plan into effect as quickly as possible. Creating a new quango that will gobble up administrative money rather than putting tar on roads and rail under new rolling stock is not the way to go. This is the way that has bogged down infrastructural development for decades. More of the same is what we can expect from this bankrupt Administration.

Mr. Killeen:

I welcome the concept of utilising all available sources of funding, including private finance, for infrastructural projects. I want to see careful consideration being given to all the alternatives to borrowing and they should be assessed in terms of value for money in the longer term as well as strategic value in their capacity to deliver quicker results in completed projects in the short-term. One of the things on which all sides of the House are agreed is that we have a major infrastructural deficit. Those two words trip glibly off the tongue, but they do not even begin to describe the kinds of difficulties we have, such as roads that do not have the capacity for the traffic they carry. Deputy Howlin mentioned the rail infrastructure, which is decades out of date and has not been carrying the kind of freight it could carry, principally because it is not an attractive option for the people who have to pay to transport freight. This is something that needs to be considered in the context of this Bill.

The new agency is to be placed under the aegis of the National Treasury Management Agency. It should benefit not only from the substantial experience and expertise of that organisation, but also from sources of funding currently managed by the agency, although I did not hear this in the Minister's speech. Deputy Howlin, as well as a number of other speakers, made the point that it runs the risk of being another quango with no particular powers and that the work to be undertaken by the new agency could readily be done by the existing NTMA. Anybody who looks at the range of expertise required by the new agency for advice and decisions would have to reach a different conclusion. Because of the ambit of the new agency, it must be somewhat separate.

The agency should be staffed by people with expertise in corporate finance, risk assessment, project costing and management and value for money criteria. Legal and technical advice will also be required. It is hoped that substantial economies of scale can be obtained by opting for a centrally resourced expert advisory service available to local authorities and other procuring bodies. A service such as this has not been available to these bodies until now. Since the advent of the NDP, local authorities have been undertaking projects of a scale they would not have expected even in the relatively recent past. It has presented difficulties in terms of management expertise across a range of areas.

It is desirable to build incrementally a valuable resource of expertise and experience in very specialised areas. It should benefit the State for many years to come because of the quality of its advice and its availability to local authorities, vocational education committees and other smaller agencies which will be involved in public private partnerships and design, build and operate projects. Local authorities and other bodies have not until now been in a position to obtain expertise in these areas. It is virtually impossible for county councils, vocational education committees, semi-State bodies and even Departments to build up and retain such expertise, partly because the kind of project for which expertise is required is undertaken fairly infrequently. The mass of projects at national level is far more likely to sustain and provide work for the experts the Minister envisages. There is a huge amount of work to be done by the agency in this respect.

From its inception the agency will be required to maximise value for money for the State. Many of the speakers today have said that they are quite dissatisfied with the application of this criterion to projects in recent years. The agency will do this not only by identifying the most beneficial financing arrangements but also by ensuring that the best commercial standards are adhered to in the areas of project costs and evaluating financial risks. This is something we simply have not been good at in the past. In some respects it is a need to which we had not even adverted. To date, most of the projects have been financed directly by the Exchequer and, up to the last four or five years, by borrowing. Since then they have been financed mainly from State revenue. There is considerable anecdotal evidence of laxity in relation to cost overruns, variation clauses, add-on elements and so on. There was at least one embarrassing episode involving an NRA project in the south of the country, which had considerable cost and related difficulties and ended up costing the taxpayer a lot more than should have been the case.

I frequently hear my former colleagues on Clare County Council, as well as some of the staff, say that all projects undertaken in County Clare have come in under budget. Two large road projects have been dealt with by the NRA, Clare County Council and the regional design office. That office has been a success, dealing with projects across four local authorities. It put together expertise that the individual authorities could not have assembled. Credit is due to the county engineer and his technical staff that two major projects have been completed within budget, with minimal delay in one case and substantially within the time-frame set in the other and with the minimum of inconvenience to the public. There were unforeseen difficulties in the projects and these have been addressed with alacrity and the minimum of fuss.

That augurs well for the capacity and ability of the authority to undertake the Ennis bypass project and the Gort to Crusheen project. We all run the risk of being parochial but those projects, following those at Newmarket-on-Fergus and Smithstown, are part of a critical road network in the west. They form part of the main Derry to Cork and Rosslare western corridor and will transfer some of the excessive traffic from the radial routes out of Dublin and enable the towns in the west to compete on a level playing field.

They are a long way behind schedule, however, as are projects around the capital. There is increasing evidence that the radial routes in and out of Dublin are creating as much difficulty as they are addressing. Anyone who uses them frequently finds them seriously clogged. Any economic or regional policies that continue to direct huge volumes of investment, traffic, service industries and State bodies into Dublin will create enormous difficulties for the economy. They will create problems for those living in Dublin who face the daily grind of making their way through those clogged up routes and will be an enormous drain on resources.

There is evidence that less infrastructure will be delivered than is provided for in the national development plan. High inflation in construction and civil engineering is a major factor in this. Those in the industry say it is caused in part by the investment in the heavy plant and equipment necessary to build the capacity required for the plan. There are others who attribute less charitable reasons for the costs of over-runs and increases on the original projected figures. There is no doubt, however, that there is now more capacity than there was five years ago. There was also competition from foreign companies and it is likely that the new agency, the NRA and the other agencies will be in a position to get better value for money over the next four years than has been the case until now.

The new agency should conduct a value for money audit of projects undertaken in recent years. There is no point coming into this House with anecdotal evidence about these projects unless a professional examination of exactly what happened is undertaken. Taxpayers money is being used in these projects and the agency would be doing a valuable job. It might be expensive in the short-term but it would lead to enormous returns and would not be difficult to do. There is a demand from the public and from political sources that such an audit be undertaken and published.

Mr. Naughten:

There is a demand for the Ennis bypass.

Mr. Killeen:

That should be the number one priority. The audit should also establish if these inflated prices are the result of the operation of a cartel. We have all heard stories of the limited number of companies in the civil engineering area which are the only companies pitching for projects and getting them as a result. The agency should seek the assistance of the Competition Authority, if required, to examine these projects. There might be no truth to the rumours that have been circulating that there is such a cartel.

Practices imposed with good reason by the NRA and other procuring bodies have limited the number of Irish players in the market. They exclude new civil engineering contractors from being a party to some of these contracts, or even pitching for them. This must lead to poor value for money, a waste of resources and a burden on the taxpayer.

The regional design teams of the National Roads Authority are a good example of the economies of scale that can be achieved and the expertise that can be gathered when local authorities come together to provide designs for their roads. Similar central resourcing would be of benefit to the new agency. Previously we have had design, build and operate systems, public private partnerships and private finance. Those are the funding options that exist besides procurement. A number of public private partnerships are already under way. The agency will need expertise to be able to assess the relative value of each option, particularly in relation to value for money. Such expertise has not been available to Departments and local authorities and we have been poorer for it.

The experience in Britain of unexpected costs and difficulties associated with the new options make it prudent for us to examine potential pitfalls. Along with its responsibility for providing funding, the agency will have a job to do in this area. It is also important that private sector involvement in financing of projects is optimised because we have a major infrastructural deficit that the public finances cannot address quickly enough.

Under the legislation, State authorities will be obliged to seek the advice of the agency but not obliged to take it. There will be a need to comply with procurement rules and avoid conflicts of interest. The Minister mentioned guidelines that will outline the circumstances in which NDFA advice must be sought. That is important because there could be conflict.

Funding under the NDFA will be backed with a Government guarantee and, therefore, it should be possible for it to borrow at better rates than the private sector. There will also be less need for direct State funding for projects. When the Taoiseach spoke in Ennis prior to the election, he referred to the agency as the likely conduit for the Ennis by-pass, the Gort to Crusheen project and a number of others along the western corridor.

There are those who would say the idea was plucked out of the hat following the general election when everyone was aware the finances required for some of these projects might not be available. A snippet of the Taoiseach's speech was played on a local radio programme a week ago when an attempt was made to infer that he said the Ennis bypass would proceed immediately. Unfortunately, what he said was that it would be considered in the context of the funding provided under this agency. That happened approximately ten days prior to the general election, therefore it gave me an opportunity to remind those who said the news of financial difficulties was entirely new to them that they were wrong.

As I said, the funding will be backed by Government guarantee. For that reason it will have advantages in terms of interest costs and the amount available to the agency. It has implications for the general Government balance, a new measure of finance which will come into play in regard to our obligations under the stability and growth pact. Given EUROSTAT rulings, no doubt it will impact on our standing under that particular ruling. Those who said the commitments under the new agency will be off the balance of the books are wrong. The Minister said in his speech that the funding will be under the figures considered by EUROSTAT and it will come into play in regard to our obligations under the stability and growth pact.

The Minister referred to rigorous corporate governance requirements. This is a very important area because, bearing in mind the size of the projects, the costs involved and the fact that a national agency will be dealing with complicated financing arrangements and looking at various options, it will be of the utmost importance that any conflict of interest which might arise will be open, visible and transparent. There should not be disclosure of confidential information which would be a considerable worry to those involved.

Section 5 provides for special purpose companies to raise finance. This can be done directly by the agency or at its behest. These special companies must have the Minister's approval but they do not have a Government guarantee which extends to other finances provided under the agency. Presumably in those instances some of the funding at least will come from tolls. Many of us must be thinking it is a great pity much more work was not done long ago under this system because the kind of infrastructure we now lament the loss of would be long since in place, probably paid for and available to benefit the national economy and the comfort of citizens.

Mr. Eamon Ryan:

I wish to share my time with Deputy Cowley.

An Ceann Comhairle:

Is that agreed? Agreed.

Mr. Eamon Ryan:

I would like to take the opportunity to thank the last speaker because it is the first time in a long time I have heard some sense coming from the Fianna Fáil benches, particularly in regard to the transport issue. I could not agree with him more when he speaks about the motorway proposals that Fianna Fáil and the Progressive Democrats introduced, which will suck life into Dublin. The national planning strategy will mean nothing if there are no motorways leading to the centre. I could not agree with him more that the Ennis bypass will be at the top of the Green Party's road building programme, ahead of the nonsensical over-bloated motorway schemes. I request he goes to the Minister, Deputy Brennan, who is of the view that no one in the House other than the Green Party holds these views. My colleagues in Fine Gael and Labour seem to believe one can provide motorways throughout the country while at the same time talking about the possibility of promoting public transport.

I am not here to talk about public transport, even though I would like to, because I want to address a number of points in the Bill. One thing struck me during Taoiseach's Question Time – I do not know if the Department of Finance officials were aware of it. When discussing the PPP process, the Taoiseach uttered a very strong line in favour of the Green Party to the effect that it espoused the same opinions and views of the Department of Finance. That was a very interesting and welcome development. I hope I can now speak on behalf of my colleagues in the Department of Finance in raising some critical analysis under the National Development Finance Agency Bill so that we do not rush into a financing system for infrastructural development which will cost more in the long-term than the political ideologues on the right would lead us to believe.

I do not have a problem per se with setting up the agency or with the use of public private partnerships. I have a problem, however, when they are applied in the wrong context and when the risk factors are not analysed correctly. I will highlight a series of problems with the PPP process and the flaws we may be about to witness. We must look at the private sector in assessing projects. If one looks at a number of recent major private sector investments, including the Telecom sector, they proved spectacularly bad at putting a correct value in terms of investment in assets. I do not think we should necessarily believe that private is always better than public when it comes to making investment decisions on major infrastructural assets. Private sector thinking lacks a critical part of the thinking of the public sector, that is, a long-term analysis. I would argue that the private sector tends to be constrained to fairly short-term timeframes.

People give out about politicians who just look towards the next election, but under the Stock Exchange rules, large corporations look to each quarter rather than on a long-term basis. One example of where long-term planning is needed and where I do not think private interests would give the correct analysis is in the energy market. We must make a major investment in our ESB transmission network and power stations over a number of years. The decisions made now will have an effect in 40 years' time. Normally the life cycle of these plants would be ended over 30 years and depreciated over 20 years, but in reality they will probably be with us in 40 years' time. Therefore, the investment decisions we make now in regard to the energy market, for example, will have an effect in 40 years' time. When I go to the electricity grid people and ask do they think we should be investing in transmission connections to the renewable network, which on a long-term basis in 40 years' time is where the country will have a competitive advantage, make money and be leading the way, they say no because the Government's view is that we must follow short-term market considerations and unless there is an immediate market for the product they cannot make that investment. One of my big fears about the public private partnership system is that it is short-term and State investment needs to be long-term.

Another example is Dublin Airport. People are now saying that in 20 or 30 years' time 30 million passengers will be passing through the airport. Has there been an analysis of the amount of oil that will be left in 30 years' time? Has anyone thought how these people will fly? We may be driving our cars on hydrogen fuel, but in 30 years' time jet fuel, which one will need to get these big planes off the ground, will not be available, or if it is, it will cost a huge amount of money. Michael Ryan will not be flying to Stuttgart or wherever for a €1 hop, it will be a real luxury. I would argue that the private sector cannot provide that sort of analysis on a long-term basis, therefore we need the public sector for that purpose.

It is very important in any PPP process or in the way this agency will work that there is a separation of the design of infrastructure and funding. Where funding dictates, design mistakes will be made. We need to put the right infrastructure in place. If financiers are saying we need this type of structure it will not be on the basis of the correct design or need on a long-term basis, it will more than likely be based on a short-term cost analysis of the greatest return. A simple example is choosing a metro route.

The private financial sector will say we should go through the docklands where there is an immediate demand and it will pay back in ten or 15 years. A transport planner would say this is a project which will be with us for 100 years, we should go through Finglas and the lands zoned in that area which could be developed in the long-term to bring about proper planning of the city. It is vital that design analysis is separate from funding analysis. If we design our infrastructure on the basis of what bankers and financiers tell us, it will be unacceptable.

Size matters, as another Deputy has said. One of the problems with public private partnerships is that they concentrate on big developers, from Ireland and internationally, who are seen as able to deliver the type of projects involved. There is no competition when there is a small number of large development companies, such as Treasury Holdings, National Toll Roads and others. Companies of that size are the only ones with the status and leverage to take on the contracts in question. The PPP process must be changed to favour small indigenous companies in order to let them grow. That has been a failing to date.

I am concerned about the increasing incidence of people leaving the public sector and immediately going to work in the private sector for contractors bidding for public projects. This Bill should include a clause, which the Green Party will put forward on Committee Stage, to have a time gap before a public sector worker could work for such a private contractor. There is an unhealthy trend where people are gaining valuable experience about how the public sector works and then using that knowledge for private sector gain. There is a need for amendment to the Bill on conditions of employment to allow for a short time gap where people cannot move from the public to the private sector.

One of the most damning arguments against PPPs is that they are expensive. The State is purchasing at a much higher interest rate than it would borrow at. There is also the cost of the 15% profit that any private sector investor will look to make from any project. Not only is the State paying a higher rate but it is paying a profit also. This is not a good investment and, in many cases, PPP is not the right way to go. I am concerned that, in new infrastructure areas, the State does not have the technical expertise to carry out a proper risk analysis when it comes to setting aside costs. Much work needs to be done and the key to PPPs is how risk is tied in.

The explanatory memorandum states that the role of the Minister for Finance with regard to the formulation of development policy on PPPs will remain unchanged. What then is the purpose of this Bill? Why is this agency being set up if the Department of Finance still holds the purse strings? It is strange that the agency is to be set up and given powers but the current structures will still apply. I would prefer more balance and a situation where everything is not given over to the private sector or to this independent agency.

The history of the early years of the State and the Department of Finance shows, in many ways, a shamefully conservative position. There was little investment or borrowing for the development of the country and that is being paid for now. A similarly conservative approach should be avoided at this time as should the belief that the private sector is the only one which can progress development. A return must be made to the possibilities of public enterprise which the founding parties of the State embodied but have lost. There should be trust in our ability to develop our assets and country. I do not agree with the Government parties that it is only private profit makers who can make the right decisions.

Dr. Cowley:

I was greatly interested to read that the purpose of the National Development Finance Agency was to establish an agency that would assist in providing cost-effective finance for priority infrastructure projects. I am interested in anything that will allow infrastructure projects to proceed. That has been the problem in the west in that it has lacked basic infrastructure that was and still is needed to make it a competitive area. Because of that, the west is losing its youth and half of its graduates must go to Dublin to get their first job.

The agency should work nationally because we need to redress the situation where the national development plan has done the west no favours, even though it is supposed to be a national plan. A policy of balanced regional development supposedly exists for all the State, but does not. This Bill should redress the situation where national roads expenditure in the BMW region is 29% behind target while in the south and east region it is 45% over target. It would be something if this Bill could redress that, and provide broadband, railways and other necessary infrastructure such as a proper road to Mayo.

I get despondent when I read that the Bill will provide finance for priority infrastructure projects because I know what that means. The west was never a priority and will not be. I would be happier with the Bill if it helped to provide proper roads throughout Ireland instead of motorways to Dublin and other places. It does nothing for second and third class roads. The Bill should include provision to prioritise areas which lack basic infrastructure, such as Mayo, so that every area in the State would have, not a motorway, but a proper road which would for the first time give some semblance of equality across the State. This would put an end to the comedy of the roads into Mayo, which is not really a comedy but a laugh on the people of Mayo. It is a tragedy for them, not a comedy.

A century ago, my village had a twice daily train service but it is now lucky to see a bus once a day. A day does not pass without damage to cars on the N5. The NRA continually neglects the N5 but it is the Government which is against balanced regional development. The multinational Allergen factory, which provides very good jobs in Westport, has to repackage its goods after their journey on the N5 to Dublin because of the condition of the road. The situation is scandalous and it is time it changed. In one recent episode, 13 angry motorists damaged their vehicles in craters on the N5. This Bill should not concern itself with motorways but should prioritise decent roads for every part of the State.

The national development plan is at its halfway stage. The delay in the national spatial strategy has been problematic, although that is a gross understatement. The plan was the equivalent, in rural terms, of putting the cart before the horse. How could the NDP work without the national spatial strategy?

What will this Bill do for Mayo and the west? Will it provide the necessary schools and roads which have been denied by generations of Fianna Fáil and Fine Gael representation? If promises were infrastructure, the west would be a competitive area and would be able to hold on to its youth because it would have a future. However, promises are not infrastructure and the west has only bad roads, rail and telecommunications, with no mobile phone reception or ISDN in some parts. The people of the west have no future. Professor Seamus Caulfield analysed census figures and said that the west was the only region in Ireland in dire straits due to the terrible ongoing depopulation. This Bill is not the answer to that problem. The west did not get the necessary funding before and will not get it now.

The Bill is a cop-out. Its main purpose is to provide an alternative to mainstream up-front Exchequer funding. However, the kernel of the problem is that the west has not got this funding. How is this Bill to provide it? Perhaps, it is a way of giving people in the west the money they need and which would not be possible without the Bill. The money the agency raises counts as Government borrowing but not Exchequer borrowing, and this might mean that money borrowed in this way has EU approval as a form of borrowing within single currency membership rules. However, this is not certain and depends on the view taken by EUROSTAT. It may be that raising money through toll roads on motorways, which will give income return to private investors, means that it will again serve the unbalanced regional development agenda and the motorways of the east. Under the NDP, this has already copper-fastened the development of the south and east to the detriment of the BMW region, and north and west Mayo in particular.

Why should the people of the west have to jump through hoops, with Europe and others, to attract funding to their area from central Government? Everywhere is equal but some areas are more equal than others. The west matters but it has been ripped off; the money that came from Europe was made on the backs of the people of the west, and they retained Objective One status after a hard fight. That status enables us to obtain higher grants, but what good are these when we cannot get the money in the first instance?

Making profit is the objective of the private sector. Let us consider the example of the provision of gas. The only way gas will be made available in Mayo is through a public service obligation. The Government has already said as much, but has not even taken the first step to ensuring that this happens by seeking EU permission to provide gas. The new body will be a new quango, like Bord Gáis, and will only operate where it can return a profit. There will be a pipeline in Mayo, but it will take the gas away and not distribute it throughout the county. Studies show it is not commercially viable to provide gas in any town in Mayo. Putting this on the agenda of the PPP is condemning us to the neglect with which we have become familiar. Even if the private sector was to become involved, it will have to obtain a return. This means that poor people could not avail of these services, to which, as citizens, they are entitled.

The Bill represents a failure to provide balanced regional development. The country should not be taken for a ride by the private sector. I question the need for this new structure, particularly in view of the fact that many structures are already in place. We have been let down by the NDP and the health strategy is in tatters – we do not need more bureaucracy. Why should we sell our souls to the private sector? What will it cost us? We are very good Europeans and we did very well by the Nice treaty. Perhaps, therefore, we should enter discussions with the Commission. How will this agency conduct its business when the NDP is failing so horribly, particularly in the west? Is not the Bill a smokescreen to give the impression that the Government is doing something when it has squandered our wealth and forgotten about the west?

The Taoiseach was recently quoted as saying that the private sector should have a role in providing broadband services. He made this statement after the decision was taken to substantially reduce expenditure on the roll-out of broadband infrastructure. The western investment fund was cut by 68%, CLÁR funding was cut by 25% and there were further cuts in REPS and other farm schemes. The new body bodes badly for our third class roads and crumbling schools. As with broadband and other essential needs, Mayo will have to wait until every other part of the country is serviced.

It has been stated that the NDFA will be staffed by experts in company finance and will have the ability to deliver large building projects. It will also advise the Government on how to borrow at the lowest rates. Why do I have a sinking feeling about this? Why do I feel the Bill is about serving political parties, big business and urban areas? It will do nothing to improve the Third World roads or the other infrastructural deficits in Mayo. CIE is considering closing the fine freight yard in Ballina. What about the Ballina-Manulla train line and the Claremorris-Limerick lines? We deserve better, but this plan will not give it to us.

Mr. Curran:

I have listened to a number of contributions to the debate and noticed that people's perception of what the agency is going to do varies considerably. One Deputy referred to it as another level of bureaucracy and a quango. If I was to believe what he said, I would have no faith in the Bill. However, I do not believe him.

People have legitimately used this debate to discuss infrastructure, which is the biggest issue we are likely to face in the coming years. Ireland entered the 1990s with high unemployment and finished the decade low employment. The consequences of that are significant. People's lifestyles changed and the population and the level of car ownership increased. One can see the consequences of this every day. I left Clondalkin at 9 a.m. this morning and it took me two hours and ten minutes to travel the seven miles to Leinster House. I have tried a variety of routes but to no avail. It is frustrating to see someone walking by when one is stuck in traffic, because one knows one will not overtake that person while travelling at less than 3 mph. Such has been the extent of growth in this country that current traffic levels on the West Link toll bridge have already equalled those predicted for 2016.

If we are to tackle infrastructural deficit in an efficient manner, it is important we consider how to finance it. I understand the National Development Finance Agency Bill, 2002, deals with that. Some Members have said the agency will determine the detail of the projects, but that is not my understanding. It will look at the best and most efficient means of raising the funding. There is a huge range of infrastructural deficits – I refer here to those relating to national roads, Luas, the introduction of a metro, airports, the upgrade of rail transport, etc. – in respect of which major funding will be required. Clondalkin would greatly benefit from the upgrade of the Kildare route project because virtually the only means of travel between Clondalkin-Lucan and the city is by road. The Kildare route project would lead to the lines being upgraded from two to four tracks and a commuter service could be provided as a result. It is for such projects the agency will provide efficient financing. It will also secure finance for hospitals and schools, particularly primary schools, in our expanding suburbs.

I first became aware of the agency through reference to it in the Fianna Fáil election manifesto. I am glad the Bill to establish is now being introduced. The agency is necessary because of the amount of money that is to be spent on our infrastructure. The Bill needs to focus on the most cost-effective and efficient means of raising those funds. Some Members seem to think the sole focus of the agency would be public private partnerships. Such schemes have a role to play and there is a place for them, but they will only account for a certain percentage of the funding that is to be raised.

It makes sense to bring together the expertise to manage the funding of these projects. The impression has been given that the agency will design the projects, but, according to my reading of the Bill, I believe it is envisaged that Departments will present the finance agency with their projects to determine how best to progress them. The latter may well be achieved by borrowing or through public private partnerships. In any event, the purpose of the agency is to provide the financing in the most cost-effective and efficient manner.

The explanatory memorandum says that "State authorities will be required to seek expert advice from the NDFA on commercial and financial issues associated with public investment projects". These bodies often produce fine plans, but have great difficulty in raising the finance, or, where they do raise it, they may not do so in the most efficient way.

The NDFA can only raise limited funds and, therefore, it will either raise loans or establish public private partnerships. In light of the amounts of money involved, I expect it to borrow at favourable rates. However, there is no such thing as free money. Some Members referred to the NDFA as being able to magically provide money without cost, but there is always a cost. There is also a cost to public private partnerships – they do not come free of charge. The advantage of establishing this agency will be that it will allow a quantifiable measurement of value for money.

A number of Members stated that public private partnerships are undesirable, but they have no means on which to base this assertion. Public private partnerships do not only apply to major projects. I understand that a school in Tobercurry has been built on a public private partnership basis. I am told – I have not seen it – it is an excellent development. Public private partnerships look at more than the greenfield site and the structure of the building. They examine what other costs, such as maintenance, will be associated with it.

I read in today's Irish Independent that there will be a new funding system for the Luas extension in Cherrywood in the Dún Laoghaire-Rathdown County Council area. It will cost approximately €260 million. No one knows if that is the most expedient and efficient way to develop the project. The establishment of this agency will seek to ensure that public private partnerships deliver value for money. The Opposition is right in that if we do not get value for money from public private partnerships, we should borrow money. The agency will afford us the opportunity to clearly determine if we are getting value for money. Public private partnerships are a necessity.

At the outset I listed the infrastructural deficits in my area, which are significant. If we want to provide proper facilities in a reasonable time period, we must get private funding. In the Dún Laoghaire-Rathdown area, private developers were prepared to make a contribution towards the provision of Luas if development land was made available because they could see the benefits. We must work more closely together as we move forward. I am not saying we should have public private partnerships at any cost. However, they should be encouraged where they are proven to make sound economic sense. If we do not take that route and introduce additional funding, the existing infrastructural deficit will be prolonged.

The viability and competitiveness of our economy and the welfare and quality of life of the people depend on the delivery of facilities and services in a more reasonable time period. The national development finance agency will help to move some of these projects forward. Some may happen through conventional means of borrowing, but public private partnerships are an important part of our development. I heard Deputies asking who would provide a road or a gas pipeline in a certain area. I agree that some areas will not suit public private partnerships. However, some projects, which are economically sound, will suit them. They will bring additional funds into the economy to deliver such projects. If additional resources are not made available, the time period will be too long.

I commend the Bill. I look forward to the establishment and operation of the national development finance agency.

Mr. Naughten:

I welcome the opportunity to speak on the Bill. The delivery of the national development plan is a shambles. That was seen last Thursday week when as the capital city ground to a halt, the Minister for Transport sat snugly in his Department and announced the Estimates which meant there would be no new roads projects in 2003 and that many vital infrastructural projects would be shelved. Deputy Curran highlighted it again in the House. It takes him as long to travel from Clondalkin to the city centre as it takes for the Minister of State at the Department of Finance, Deputy Parlon, or me to travel here from our constituencies. It is totally unacceptable. The city and the country are grinding to a halt because we are not investing in infrastructural projects. The five inter-urban routes under the NDP have been delayed by at least three years and will not open until at least 2009.

Capital spending has been savaged in the 2003 budget Estimates. Infrastructural spending has been reduced by at least €400 million or 6% compared to the 2002 allocation. The Taoiseach tried to defend these cuts by saying we must be realistic about what we can afford in light of the downturn in the international economy. However, what he and other Ministers fail to acknowledge is that our economy is growing by at least 3.3%.

As regards public transport, which I am sure is close to Deputy Curran's heart, Luas is again running behind schedule. It will not be operational until at least 2005. In a parliamentary reply I received yesterday the Minister for Transport said that the construction of Luas will not be completed until 2004. He said that passenger services will not commence until commissioning and safety checks have been done. It will be at least 2005 before Luas serves the people of Dublin city and its suburbs. The investment programme is being dragged out. The Railway Procurement Agency, which will oversee the Luas construction, has a borrowing requirement for 2003 of at least €90 million. That body also has responsibility for developing the Dublin metro. That proposal is also lying idle and gathering dust. This project needs to be expedited.

The Minister recently sanctioned a 9% fare increase for CIE. The subvention to CIE will be approximately €500 million in a full year or €10 million per week. What improvement will we see for that investment? The Minister has promised that users of public transport will see a difference in service capacity and frequency in 2003 when the major infrastructural projects, which began in 2000 and 2001, are completed. We all know that will not be the case because the additional capacity has not been provided for the public transport system or for our roads infrastructure. Deputy Curran will still spend more than two hours travelling into the city – it will probably be closer to three hours this time next year. That is the situation with which we are dealing on a daily basis.

As regards roads projects, more than 20 major national roads projects, which were promised under the national development plan and cleared by An Bord Pleanála, will be delayed by several years because of the funding shortfall. Not one additional new kilometre of road will be constructed under a new project in 2003. Those projects include the Monasterevin bypass, the Sligo inner relief road, the Ennis bypass, which was mentioned earlier by Deputy Killeen, and others which cost more than €1 billion and which aim to improve road safety and eradicate major bottlenecks throughout the country. The Minister has repeated that the road construction programme under the national development plan will not meet its 2006 target. Both the Taoiseach and the Minister for Transport accepted only in recent weeks that we will not meet the target set out under the national development plan. The Minister said it will take an extra couple of years. It will be at least three years before the major roads projects are put in place and it will be longer before other projects, such as bypasses and inner relief roads, are completed.

The Minister for Finance, Deputy McCreevy, said that both health and infrastructural spending were now considerably above the European average, which we have lagged behind for decades. It is above the European average, but the Minister has failed to recognise that our infrastructure is, as the Tánaiste said, equivalent to Third World standards. We must dramatically increase the level of funding we provide for infrastructural projects to catch up with the level of investment in the European Union. Meeting or being slightly above the European average will not help to improve the congestion and bottlenecks.

Yesterday the Minister for Transport stated that the NDP projects will depend on funding and that a review of the NDP will take place next year. There is not much point talking about reviewing the NDP next year when we know the cost overruns have been dramatic. The Minister is living in cloud-cuckooland. The investment in national road improvements for 2000 to 2002 is approximately €2.62 billion. That is in excess of 12% compared to what is provided under the national development plan. That leaves a significant shortfall because the cost of the NDP is running in excess of 66% of that projected at the time of its publication.

The Department of Finance is looking at multiannual budgeting, but there is not much point in looking at that when we do not know the cost of road projects to date. Deputy Killeen blamed the significant increase in costs on construction inflation when he spoke earlier, but failed to recognise that one of the other causes is the fact that the projects were incorrectly costed initially. A higher specification is required in the case of the Dublin Port tunnel than was originally planned under the NDP and even when that was taken into account the National Roads Authority forgot to account for extractor fans costing more than €150 million to take fumes out of the tunnel. Many projects were originally conceived of as dual carriageways built over the existing road network, but when they were upgraded to greenfield motorways, the projected costs were not increased correspondingly.

Deputy Eamon Ryan spoke earlier about motorways and the House is aware of the Green Party's position in relation to these projects. The party wants to develop existing roads and there is a debate ongoing regarding that, but some of the arguments being put forward must be dispelled. I have first-hand knowledge of the projects that are going ahead since the new M6 to Galway is being built over my family's farm and passes within 500 metres of my own door. The Green Party wants to upgrade the existing road between Athlone and Ballinasloe by widening it from a single carriageway to a dual carriageway. If the NRA went ahead with that proposal there would be slaughter every day of the week on that road because it would still not be able to accommodate the volume of traffic using it. The only way to address the carnage on one of the most dangerous sections of road outside the Louth-Meath Garda division is to build a new motorway between Athlone and Ballinasloe and continue it to Galway. Every community along the N6 would tell you the same story and I am sure the same is true right around the country. While the Green Party questions investment in these motorways, it fails to talk to the communities along these roads on which lives are put at risk every day. That issue cannot be ignored when we speak about motorways because that form of road is extremely safe compared to single carriageways.

The Minister for Transport has not been able to fund these projects because his Department is working off the 1999 figures despite the fact that the Taoiseach told me last month that if I put down a question to the Minister, I would be given the revised figures. They have not been furnished to me because the Minister for Transport does not have them which makes me question how the Cabinet sub-committee on infrastructure can assess what investment needs to be made in road projects. It cannot give advice in relation to that because we do not have accurate figures. The commitment the Taoiseach gave on the floor of the House has been ignored by the Department of Transport. The Minister insisted that when the Estimates were published they would indicate that funding had gone up by 2% on this year's budget. However, if we take into account the extra €80 million allocated after last year's Estimates, there is actually a 2.2% cut. If ordinary inflation as opposed to construction inflation is included, the real cut is of the order of 6.7%. Given that construction inflation is not accounted for, there is a dramatic fall off in the level of investment in roads projects in 2003.

Last week, Deputy Richard Bruton said that the delivery of road and other projects under the NDP is sloppy in relation to monitoring of costs, monitoring of physical outputs and control of overruns. Slippage has become the order of the day in the NDP, but the problem continues to be ignored. No matter how much legislation we bring in, unless we keep a tight rein on that slippage we will have significant problems delivering even a revised plan. The Bill before the House will help to relieve problems in the areas Deputy Curran mentioned and I hope it will address the congestion in the Dublin area. However, it perpetuates regional apartheid because it ignores the need to develop infrastructure in the regions. The sole purpose of the NDFA is to provide funding under the national development plan through public private partnerships, which is the core principle of this legislation. It will have a detrimental impact on regional development because the projects which will be financially viable for the private sector will be large undertakings in the main urban centres including hospitals, schools and sewerage schemes, or systems involving large numbers of people such as a Dublin metro. The only projects that will benefit the regions will be the interurban routes, but the Minister for Transport has admitted his intention to toll such roads without looking at alternative funding mechanisms. The introduction of tolling will be an additional tax on employment and industry in the regions and jobs will be put at risk.

The only action taken by this Government and the Minister for Transport in relation to regional infrastructure has been to close the Sligo-Limerick line by physically taking up the track and to wind down rail freight services which will mean the closure of further lines. If the savings made possible by private sector funding were reinvested in other projects in the regions where private investment is not viable, it would be welcome. However, those savings are being used by the Minister for Finance to subvent his budget as a result of massive cost overruns. County Mayo is serviced by the N5, mentioned by Deputy Cowley, which is a glorified cart track that is supposed to be a national primary route, and by a clapped out train that has been downgraded by Irish Rail in the last couple of months. Prior to the general election, Deputy Cowley asked the people to elect an Independent saying he would deliver the N5, a proper rail service and investment in County Mayo. The N5 was to be upgraded by 2019, but that has been put back to 2025, which is how Deputy Cowley has delivered. He can come in here as often as he likes to blame political parties for the lack of investment, but it is time for us all to concentrate on the need to invest in the regions no matter what side of the Chamber we are on.

The only proposal the NRA is making is to close the N5 and amalgamate it with the N4, which is a fine example of the delivery of a project by the Government. It is a contradiction of what a Government Member said prior to the last general election. We can talk all we like about the NDP, PPPs, the WDC, the BMW region and the NDFA, but if there is no commitment from Government to invest, the regions will be ignored which is what is happening with the Bill before the House.

The Minister for Finance has not been prepared to invest in the regions. On three separate occasions I asked the Taoiseach to ensure that the Minister for Finance or a representative on the Cabinet sub-committee on infrastructure would meet with the board of the national pensions reserve fund to discuss putting some of that investment into our roads infrastructure. In his usual style, the Taoiseach talked around the issue, but it has been evident that he has not looked at ways to invest some of that fund in roads projects. He and the Minister for Finance are quite happy to see €1 billion from the pensions fund channelled into foreign stock markets to support foreign employment in foreign industries. We are not prepared to invest that money in our own infrastructure and to commit to a return on it.

The only solution the Minister for Transport can see to the huge deficit in funding under the national development plan is to introduce tolling. He is not prepared to look at any other element that could fund those projects such as providing exclusive service rights on some of the motorways, shadow tolling and other mechanisms.

As Deputy Ryan said we have to be extremely careful that the privatisation of roads will not end up costing the Exchequer more in the long run and that it will be a mechanism used by Government to take liability away from the Department of Finance so that it can be covered up so far as the European Union is concerned. The projects must be seen as value for money and must be delivered on efficiently and effectively if they are to succeed. I am sure there are projects that can fit into that category but there is also a responsibility on the National Development Finance Agency to ensure Ministers take a responsible attitude on how they seek funding. Under the provisions of section 8 the Minister will refer a project to the National Development Finance Agency and seek the expert advice of that agency on how to fund that project. Eventually responsibility for the decisions on the individual projects comes down to the Minister or the State authority involved. The Minister or the State authority, such as the unaccountable National Roads Authority, do not have to take the advice of the National Development Finance Agency. There must be some element of accountability. The experts in this areas will provide the advice on how to plan and fund the project, yet the Minister, or the State agency, can ignore that recommendation, as in the case of the National Roads Authority which does not have to take the advice provided.

I hope a mechanism for accountability will be provided in the legislation. I ask the Minister to look at section 18 with a view to ensuring an element of accountability so that we can question him on the floor of the House on the working of the new agency. It is crucially important that such organisations and agencies are accountable to this House. The Minister has only to ask any member of his party or any Member about the National Roads Authority. It is an unaccountable organisation which has massive budgets and spends massive amounts throughout the country and has a huge impact on regional development and what areas will be developed. There is no point in speaking about a spatial strategy without the NRA being tied into it, yet the NRA is unaccountable to the House on how it spends that money.

Mr. Gilmore:

This legislation has its origins in the general election campaign. The Minister for Finance will remember distinctly the second day of the general election campaign when, with all the razzmatazz he could muster, he unveiled his big idea, that of the National Development Finance Agency, to the assembled media. That big economic idea was nothing more than a big economy with the truth. The first mention of this idea came in the Minister's speech at the Fianna Fáil Ard Fheis in February when he told the people they could have everything they wanted, spending, tax cuts, there would be no need for borrowing and he would work magic with the country's finances. We can all see now how that promise is being fulfilled.

The Minister's promises did not add up at that time and the solution produced is the National Development Finance Agency. It is a truly magic solution. It will enable the Government to borrow without calling it Government borrowing. It will enable money to be conjured up from nowhere so far as the public finances are concerned. Apparently this is to be achieved in two ways – to borrow €1 billion per year which would count against the general Government balance but would not be Exchequer borrowing and to produce funding of a further €1 billion per year which would fund capital projects without affecting the Exchequer balance or the general Government balance.

Hard though it is to believe, Ministers of the Government at the last general election told the public that because this new agency would borrow money it would not be Exchequer borrowing. If the NTMA borrows money that is Exchequer borrowing but if the new agency within the NTMA borrows money that is not Exchequer borrowing. Former Taoiseach, Mr. Albert Reynolds, had an expression for that type of thing which involved the use of some unparliamentary language but the manure here is just as pure.

The reality is that this whole idea comes down to public private partnerships and their advancement. The failure by the last Government to deliver on PPPs is the main motivation for the Bill. When the Government published the national development plan in 1999, it promised PPPs would provide a large share of the funding for the projects contained in the plan. That expectation has not been realised. The purpose of the National Development Finance Agency is to drive forward the PPP agenda. We have to judge it on that basis and so far the evidence is not reassuring. Evidence, particularly from the United Kingdom, shows the fears expressed at the outset of PPPs are starting to be realised.

This Bill is effectively about a new form of privatisation of the country's infrastructure. It is the instrument which the Government intends to use to drive forward a privatisation agenda except that the "P" word is not used. The Bill will put the privatisation of public assets and infrastructure into an entirely new league. Privatisation is no longer a case of the sale of a State agency or some of its assets, it is to be extended to large sections of our public infrastructure: roads, water and sewerage services, schools, hospitals, colleges, universities, ports and harbours. Even many of the courthouses in which the system of justice is administered will, effectively, be operated on a private basis.

This legislation has profound implications for the ownership and management of our public infrastructure into the future. It will change fundamentally the way in which decisions are made on infrastructure projects from schools to sewage treatment plants and set up a two-tier system for the approval of such projects. The idea is that there will be an agency, under the NTMA, which will advise on the sourcing of funding, PPPs, management and borrowing. In effect it will be a one stop shop for public private partnerships.

It is important that we look at what this legislation is intended to cover. In the press briefing given by the Minister at the time of the publication of this Bill, a list of projects was circulated. It identified the kinds of projects that might be considered. They include schools, housing projects, car parks, park and ride facilities, town hall and town centre, car testing, light rail, Luas, motorways, national roads, waste infrastructure projects, water supply schemes, sewage treatment works, group water schemes and so on. One of the striking things about the list is the use of the three letters DBO to describe the type of project in each case – design, build and operate is now the new code for what will be privatised facilities in the future.

This is privatisation with a velvet glove. Design, build and operate, no matter how it is construed, means in effect that the facilities which are to be provided under this system will be operated privately in the future, with all of the implications that has in relation to staffing, the interrelationships between the facility being provided and the local, public or State authority to which it relates.

If such facilities are operated privately, there must be a return. It is therefore logical to assume that roads which are provided under the system will be tolled. The public, who have up to now viewed roads as a public amenity and part of the public space, will from now on be expected to pay by way of tolling for roads provided under this arrangement. Similarly, water treatment facilities, water supply schemes and sewage treatment facilities provided under this arrangement will, in the course of time, have to be paid for as well. This is also teeing up for the reintroduction through the back door of charges of some kind for water or for the provision of sewage treatment facilities as is currently the case with the charging, through local authorities and private operators, for the delivery of waste services.

School buildings will come within the ambit of this arrangement. Buildings which have traditionally been provided through public funding and which have been part of the public facilities available within communities will, from now on, essentially be private buildings and will be built and managed by a private company. The schools which operate from them will effectively have some kind of a lease arrangement or have the status of tenants within the buildings, and when they are finished at 3.30 p.m. or 4 p.m. it will be open to the operators of the building to use it for whatever commercial use they want. What we are seeing is a very significant shift in the public infrastructure. Public facilities that have always been provided through the public authorities and have been available in general as public facilities are to become private facilities.

A second problem arises. It has to do with the selection of projects, with the ordering of priorities by Government for funding and the building and provision of that infrastructure. We know from experience that in the case of schools, for example, the Department of Education and Science has its own list of school building projects that it will advance. Inevitably, there is a degree of jockeying for priority on that list. Notwithstanding that, decisions on which schools get approval are very often made on the basis of political choice. All of those projects, however, have the same starting point so that, at least in theory, there is some notion that decisions are based on the merits of the case. This arrangement will set up a two-tier system for such decisions. On one hand, there will be projects which come within the PPP system which will be on a fast track and, on the other there will be other projects which do not come within the PPP system which will be in some kind of second division.

The question is who gets into the premier league. The premier league for these projects will be in areas where private interest can see the possibility of a return or some advantage in progressing the project. Inevitably, therefore, whether it is a school building or road scheme, or a water and sewage treatment scheme, the choice of that scheme in terms of qualification for PPP will very often be based on the ability of the community to pay and the degree to which the private interest considers it has an economic worth.

I have seen some of this already. A school in my constituency has already seen the potential of PPPs, and I congratulate it on its initiative. However, not every school will be in the same situation. Schools which serve disadvantaged areas are hardly likely to be first on the list of a company looking at a potential PPP. What will happen, therefore, in relation to school building projects is that schools located in affluent areas, serving an affluent clientele will become the candidates for PPPs, the DBO type of operation, and will get on to the fast track for their building project and, just as we have in the health service, just as we have in many other areas of life, we will have a second division where everybody else goes. The same will happen in the provision of water and sewage treatment. Where it is perceived that the provision of water and sewage treatment services is in an area where the development potential is high, there will be interest from companies in a PPP and such schemes will be moved rapidly through the PPP process and be progressed ahead of others.

The same will happen with regard to public transport. A previous speaker referred to a proposal which affects my constituency, the extension of the Luas to Cherrywood, Cabinteely, with which I agree. However, the reality is that the selection of the kind of scheme that will be facilitated by this agency will be based on the potential return to the investor. Again, the more affluent, the better off, the more advantaged an area or community is, the greater is the likelihood that its infrastructural project will be progressed, whether it is a road scheme, provision of services, public transport, school or any of the other public projects which are envisaged or anticipated by this arrangement.

There are two things I wish to say about the Bill in support of Deputy Burton's opposition to it. This legislation is a polite, sophisticated means of progressing a privatisation agenda with regard to public infrastructure. Through this legislation we can see the groundwork for a two-tier system for decision-making on public projects and on the country's priorities in terms of the provision of infrastructure. I refer here to school buildings, roads, public transport or any of the other facilities that come under the general infrastructure umbrella.

Mr. McHugh:

I wish to share time with Deputies McGrath and Healy.

In the past, perhaps when it was the Department of Local Government, the Department of the Environment had responsibility for all roads in the country. In a fit of political correctness the Government of the day decided to give responsibility for national roads to the National Roads Authority. Since then, there has been universal criticism of the National Roads Authority by politicians. The NRA is a great shield for the Government. It can blame the NRA when particular road projects are not progressing, while conveniently ignoring the fact that it is that body's financier. If the Government does not provide the authority with sufficient funds, the projects cannot proceed.

I have heard many experienced politicians, including some from the Minister's party, say that we should never again bestow such authority on a body whose remit is to carry out public projects. The lesson seems to be that where there is a public related function, there should be public accountability.

There is a massive infrastructural deficit in the country. The deficit is so enormous – and has been for many years – that one would have to ask if the current system is capable of producing the goods. The vibes emanating from the Estimates suggest that we will be obliged to wade through the infrastructural deficit for some years to come.

How will the national development finance agency operate? Will it have any relevance for the major part of the country? Will it have anything to offer with regard to finance for water and sewerage schemes or finance for our inadequate rail system? Will its efforts be solely related to acquiring funds for major road works? It is obvious that its only function may be to obtain money for major road works. Does that mean we can look forward to endless tolls on our new motorways? Those issues need to be teased out now.

When the NDFA comes into being, we will be told by the Minister for Finance, perhaps also by the Minister for Justice, Equality and Law Reform, the Taoiseach, the Tánaiste and others, that it is the body responsible for the financing of infrastructural projects. We will be informed that it is not appropriate for politicians to interfere with the workings of such a body. Rather than the Minister taking the responsibility for the lack of progress, there will then be two other bodies to blame – the NRA and the NDFA. Is this proposed agency a good idea or merely a device to circumvent existing constraints? Will it do its work in the same way as the National Treasury Management Agency or will it try and impose its will in a more dictatorial way?

Will the NDFA have a regional remit or will it focus exclusively on getting funding for projects in the east at the expense of the rest of the country? Will the NDFA become the whipping boy for the Minister when projects contained in the national development plan do not proceed within the scheduled time?

If the NDFA is being formed to circumvent the parameters of the stability pact, that is not a good enough reason to proceed. The way to proceed is to go back to our European partners with the clear message that our infrastructure is substandard. They must be informed that to progress as a nation we need immediate improvements. Borrowing to invest in good infrastructural projects should be outside the constraints imposed by the stability pact. That is the way forward. The way forward is not the establishment of another body which can be used to shield the Minister and the Government when the going gets tough and when our infrastructure remains deplorable, with nobody willing to accept responsibility for it.

Mr. F. McGrath:

I thank the Chair for the opportunity to discuss the National Development Finance Agency Bill, 2002. Before considering the nitty gritty details of the Bill, it is essential to recognise and acknowledge that when we discuss finances, the budget, the Estimates and this Bill, we are talking about and dealing with public money – taxpayers' money. It is essential that we use, protect and respect this money. Squandering public finances on useless projects does nothing for the country or for the needy in society. I make these points as a means of putting down a marker before discussing the detail of the Bill.

The purpose of the national development finance agency is to assist cost-effective finance for priority infrastructure projects as an alternative to up-front Exchequer funding or unsuitable private sector funding. I welcome the section which states that the State will be required to seek expert advice for the NDFA on commercial and financial issues associated with public investment projects. This is crucial to the debate on quality spending of public money. When we discuss expert advice, it should not be limited to civil servants or economic experts. We need to listen to the people and the community because they are sometimes well ahead of our so-called experts.

Is anyone in a position to explain the social, humanitarian and economic madness of sending young people with disabilities out of the State, and miles from their homes and families, to obtain services? I refer here to three visually impaired pupils who are forced to leave the State for five days per week to avail of a service in Northern Ireland because such a service cannot be provided here. This is not acceptable, it is a disgraceful breach of human rights. From an economic point of view, it is a clear breach of this legislation.

We need to consider the projects in the State that are value for money and designed for the people. Above all, we must put the needs of our people first. This is not happening at present. I hope the Bill tackles this issue head on. The theme and tone of this legislation is "value for money". However, this could also be used to prevent and stifle worthwhile projects.

I have some concerns about section 4 which states that, in the provision of advice, the agency must take into account any policy directions issued by the Minister for Finance to State authorities regarding financing of public investment projects. I see the hand prints of the Department of Finance all over this section. Let us not allow economic whiz-kids dominate this Bill. If we spend €1 million on a project now, it may save us €20 million in five years' time. We should make the bold decision to invest now. This is particularly true of educational projects for children at risk as against prison spending. One does not need to be a rocket scientist to know that if we invest in early prevention measures for children at risk, in crisis or in dysfunctional communities, we will save millions of euro later in spending on our prisons. In this context one need only talk to John Lonergan, the governor of Mountjoy Prison. I spent 20 years working in the inner city and I have been saying this throughout: intervene early and spend at that stage, thereby reducing costs and the prison population.

At one point 10% of my pupils were ending up in Mountjoy while only 1% of pupils from the north inner city were entering third level education. Radical changes need to be made to the structures of our educational services and this message is reinforced by John Lonergan and his colleagues in the prison service. It is time to challenge people on this issue and examine worthwhile, cost effective public projects that save children from our prisons. Not only is this good management of our finances, it is common sense to many people. These are the tough decisions and we must act now.

I welcome section 6 which enables the agency to borrow money, in any currency, up to €5 billion, even though I am not a fan of borrowing and I strongly believe in the ethic of paying our way through fair and balanced taxation. It may be old-fashioned but it is only proper. When we consider borrowing, we must look over our shoulder for tax dodgers and scam merchants. This is not simple left-wing rhetoric, to which the Minister may have referred on "Marian Finucane" this morning, but common sense to many of us who are on the left because we believe it works. The Revenue Commissioners tell us they were unable to collect €987 million in a three year period from people who were clearly evading their taxes, yet we can never get resources to create residential places for 1,711 adults with disabilities. I challenge people to say this is left-wing rhetoric. Furthermore, the figure of €987 million is conservative. There is always a problem or a shortage of cash when it comes to the most needy in our society and that must be highlighted.

Section 19 provides for the issuing of a report by the agency to the Minister for Finance not later than six months after the end of the financial year in relation to its activities for that year. Accountability is essential and particularly important when dealing with public money. Sadly, we have failed on this issue. We have many examples of bad practice and bad political leadership.

The national development finance agency will assist the Government in evaluating financial risks and costs and ensure it avails of the best financial package for each project. This is the way forward and I welcome the debate on this important legislation. I take seriously many valuable sections of the Bill and will support them. Deputy Gilmore raised the question of the PPPs in relation to disadvantaged areas and I am sure this will emerge as a major issue. Overall, I strongly welcome the debate on this important Bill.

Mr. Healy:

Deputy O' Keeffe has said on a number of occasions that this is the most right-wing Government since the foundation of the State and I agree with him. The Government is ideologically driven. Its Thatcherite policies will ensure that wealthy people will be looked after unlike ordinary people who pay PAYE, who are on social welfare and who try to make an honest living. That sort of thinking is all over this Bill. The idea of the agency was mentioned during the general election campaign and was used as a smoke screen to give people the impression there was plenty of money and that everything promised by the Progressive Democrats and Fianna Fáil during that campaign could be delivered on. At the time, I pointed out in a public statement that the effect of the programmes proposed by the parties and the programme for Government would be cutbacks, a reduction of services and increases in charges. That is effectively what will happen as a result of this Bill if it is passed by the House.

The Bill is effectively a privatisation measure, whereby public private partnerships will design, build and operate public facilities. In practice, that means ordinary people will have to pay for certain services unlike before or for services they had to pay for before but whose charges were abolished as a result of political pressure. We will see situations where public water supply schemes will go to tender and will be designed, built and operated by a public private partnership – effectively private facilities – which will then attract water charges. We are told this will never happen but it has happened elsewhere and the idea of the Bill is to ensure that public facilities are built by public private partnerships which means new local charges will be introduced. For instance, sewage treatment facilities will be built in this way and we will face the introduction of local charges. Small business are already being charged for these facilities. National roads and bypasses built under this Bill will be tolled and ordinary motorists who already pay through the nose will have to pay even more.

We are told that borrowing under this Bill is not really borrowing and that it is a bad thing. Borrowing for day to day expenditure is bad but there is nothing wrong with borrowing for good public infrastructural facilities like roads, railways, schools, water and sewage facilities. Our infrastructure is significantly worse than almost all our European partners and there is nothing wrong with borrowing to build these facilities. We currently borrow 34% and there is no reason we cannot borrow significantly more. During the Nice treaty referendum campaign, I said that instead of introducing a Bill like this, the Government should go back to Brussels to do what has already been done by other countries and seek to change the stability and growth pact. Our infrastructural services are so poor we need to be allowed to borrow more to build them. Portugal has already done this and there is increasing pressure on the European Union to change the system. France and Germany are already knocking on the door in this context and will be the next countries to demand their facilities be built and that they be allowed to borrow to do so, and we should do likewise.

Another difficulty I have with this Bill is in relation to accountability. Will we have another situation, as with the National Roads Authority, in which there is no accountability to this House or to any Minister? When any question is raised in relation to roads, we are told it is a matter for the NRA. That is not acceptable and must not be part of this Bill if it ever gets beyond the starting blocks.

I am also concerned about the regional balance of this proposed agency. Areas such as my constituency of Tipperary South are seriously lacking in infrastructural development, including roads. The Cashel bypass is now on hold again as a result of last week's Estimates. The closure of our rail line between Limerick Junction and Rosslare is being discussed. The electricity supply in south Tipperary and elsewhere in the south-east is not adequate for normal manufacturing industry. I am concerned that this agency would be a Dublin-based, Dublin-dominated body which would provide infrastructural services mainly to the eastern side of the country, to the detriment of south Tipperary and the west of Ireland.

Mr. Perry:

I welcome the opportunity to speak on this important Bill. The NDFA Bill has three purposes. One is to provide a central reference point where complicated financial transactions associated with public private partnerships can be examined and a true cost, as well as the proportion of risk being undertaken by the private sector, can be determined. It is disappointing that there has been little consultation in relation to this Bill with the private sector, including IBEC and prospective large funding sources. In effect, the Government is looking to the private sector to bail it out as the Exchequer has been drained of funds. The Bill will also enable the NDFA to borrow money for investment in public private partnerships where it is cheaper to do so and where the relevant Minister or the authority wishes to adopt this approach. It also facilitates the establishment of special purpose companies to finance specific, financially viable projects such as toll roads, while remaining outside of the State's balance sheet and outside the constraints of the Maastricht 3% restriction.

Ireland has a significant infrastructural deficit in terms of roads, tunnels, bridges, hospitals, etc. Under the Maastricht restrictions, the cost cannot be met immediately from Exchequer funds. That would be tantamount to paying the full cost of one's house from one's income for the first year of ownership. Other countries have also followed the route of public private partnerships to deal with this situation and, in many cases, have paid large sums of money to the private sector. The private sector in some countries is said to have got a return of 20% to 25% on its equity investment previously and even now expects a return of over 15%. It is also understood that the amount of risk transferred to the private sector is quite small.

In the context of the present massive national Exchequer deficit and the need for a cautious approach to borrowing, the Minister for Finance has remained silent on the use of the resources of the national pensions fund to finance capital projects. That has very significant attractions. While future trends are more promising, millions were written off the value in past years. We should certainly avoid the reckless approach of channelling over €1,000 million of borrowed money into foreign stock markets.

Public private partnerships can work very well. A new school which will open in Tubbercurry next week was built in record time under that system. In following that route, returns to the private sector should be kept as low as is consistent with getting projects into operation. If the private sector is being paid for risk taking, it must actually take that risk on board rather than passing it off to somebody else. Otherwise, the Government of the day will carry the risk. The private sector must carry its due share of the risk or the hit, as the case may be.

The overall aim of the Bill is to continue as rapidly as possible with the development of new infrastructure while keeping the cost of the financial packages to a minimum. Following the general election promises, the tills are now empty. There is also a remarkable silence with regard to development in the west of Ireland, including my constituency of Sligo-Leitrim, in contrast to the fanfare of announcements in connection with the promotion of the BMW region and cross-Border funding over the previous five years. The Sligo inner relief route is a typical example of promises made at successive elections now being put on hold indefinitely. The people of Sligo will not continue to tolerate that treatment by Fianna Fáil, which evidently regards that constituency as one of its safest electoral bases, with two Fianna Fáil Deputies and four Senators. It is incumbent on that large group of Government Deputies and Senators to ensure that funding is provided for the relief route project. They should make the necessary approaches to the Minister for Finance in that regard.

As previous speakers have emphasised, the proposed new agency must have a regional focus. The borrowing powers of the agency should be carefully considered and there should be appropriate priorities as to where the money will be spent. The attractions of the BMW region must be fully promoted with a view to correcting the present imbalance of development in favour of the east coast counties. Despite the emphasis on cross-Border issues in the debate on the British-Irish Agreement (Amendment) Bill, this Government has completely failed to channel funding into the Border counties. Instead of action, there has been nothing more than talk and lip-service.

Given that we are dealing with taxpayers' money in this context, the management of the funds involved is vitally important. The waste of resources in the economy has been unwise and has led to the cutbacks which are now being imposed. How could the cost of major infrastructural projects possibly have escalated by up to 60%? How can the Government account for that at a time when unit costs were not increasing significantly? Were the initial costings carried out competently and correctly? The Government has a major responsibility to ensure that the public finances are properly managed. All projects and contracts should be on the basis of closed budgets. As in the case of any private enterprise operation, agreed budgets should be adhered to and overruns should not be tolerated.

This country's poor infrastructure has economic and social consequences. It would be a grave mistake on the part of the Government not to proceed with infrastructural development. I am supportive of Government borrowing to continue with the national development plan according to a stated timescale. We should be honest with the people. They want to be told the truth. Will the inner relief road go ahead? Will the N4 go ahead? Will the N17 go ahead? The people want to know. We have a highly intelligent electorate. I hope this agency will be accountable to the Dáil and that it is not another quango. If we put down a question for the Minister I hope the reply will not be that this is not his responsibility. I hope the Minister will clarify this and that this agency will be accountable to the Dáil and will answer the questions we are elected to ask. I hope the Minister will not say in two months' time, or next year, that this is not the responsibility of the Dáil and he cannot comment on it. The Oireachtas represents the people and it must have a voice. I appeal to the Minister to ensure that elected members have a say in questions on infrastructure.

There is mounting evidence of problems in managing the national investment. A number of recent reports have criticised the management of aspects of the NDP and there are serious questions as to how it will be funded. The cost of the plan has increased to €80 billion. The Minister for Finance has a twin problem. In the short-term he faces demands for more money to be added to the investment plans already announced on budget day. That is a major problem. He is now hiving off the national development plan and putting it under the remit of another agency.

We are dealing with the growth of the country. There is road congestion and public transport is all over the place. The rolling stock on the Sligo line is more than 50 years old. It has no heating, no canteen and people can be delayed at Enfield. There is a continuous track, to give credit where it is due. It is a contradiction to invest in new rolling stock without carriages. The business exists. Up to €100 million has been spent on the Dublin Luas system. That money was spent wisely but it will be unwise if we do not get the rolling stock to justify the investment.

The rising cost of projects was due to construction inflation, the poor initial costing of some projects, increased costs in areas such as land acquisition and change in design. The report estimates that the cost of projects rose by 52% over two years from 2000 to 2001. This meant that by the end of 2001 the road programme was already well behind schedule. The cost of transport, health infrastructure environment and housing increased by 25% to 30% in the two years. A crucial issue to be faced is the financing of the entire programme. The numbers are daunting, there will be a €9 billion deficit. In other words, the cost of completing the NDP has risen from €26 billion to at least €35 billion. We are talking about accelerated costs and it makes good sense to borrow and get on with the job. It is equally important to get value for money and return for the investment. When the cost increases by 52% in two years, it indicates that something is wrong.

I am concerned about the level of development, the level of spin and the number of spin doctors employed by the Government since 1997. We have paid dearly for it. The NCC report and recommendations are frightening. They deal with the implementation of the recommendations and what will make the country competitive. There is now an enlarged Europe and business is attracted elsewhere. Private enterprise is the unsung hero in this country. People have taken the risk, invested in business and got very little in return. Those who put a huge investment into tourism are not getting the return. There is no evidence of a return on agricultural investment. The National Treasury Management Agency operates a very successful pension fund. It is an example of good management.

There should be no ambiguity about the running of the agency, how the funds will be spent, the priorities in health, road infrastructure and schools. The garda station in Ballymote, a district station with 27 garda, does not even have facilities for interviewing witnesses. Those brought in on remand cannot be kept overnight. The Minister talked today about taping facilities for interviews in Garda stations. There are not even interview facilities in Ballymote and it is a district station with a superintendent. I hope the Minister will visit it. A crashed vehicle cannot even be parked there, yet it serves the south Sligo region as far as Carrick-on-Shannon.

We can all talk about the development of the regions but people in business cannot even park a car in the middle of Sligo. This road will be deferred. Plans for the N17 have been deferred. The N4 Castlebaldwin bypass has been deferred. That is the reality. The Government can put a spin on it, can set up funding agencies and talk the talk. It is not, however, walking the walk and making improvements on the ground. It is unjust that the money of taxpayers in the west is not being re-invested in the area. They are entitled to equal treatment.

A major development is proposed for a new psychiatric unit at Sligo General Hospital. The consultants told me last week that the administration block of this unit is excluded, althoughit costs only 0.5% of the overall project. They were told they could have 36 beds but no facilities for doctors or counselling. The Department has cut off the funding. This is very bad value for money because in five years' time they will be building an extension which incorporates these facilities.

I welcome the setting up of this agency but I hope it is not another quango created by the Minister. A year and a half ago he was know as "Champagne Charlie", telling us to party on, the good times will last forever. I was told this week that an old person who wants an essential repairs grant for heating may be charged an application fee by Sligo County Council. Not only have things gone that bad, but there is no guarantee that the person in question will receive the grant. The Estimates show that there will be massive cuts in funding for health boards and county councils. The fact that all politics is local is emphasised when one encounters an elderly couple looking for an essential repairs grant. I met a lady this week who is looking for respite care. It will cost the State about €250 per week to accommodate her in a private nursing home, but it will not pay for two hours' care from a carer at home. Does the Minister, Deputy McDowell, believe that represents value for money? I do not think it does.

We are fed up of spin from the Government. It cannot blame Fine Gael for the economic crisis, as there was a budget surplus of €2.5 billion when its last term in Government ended in 1997, compared to a deficit of €2.5 billion now. The Government is cooking the books. Although Deputy McCreevy is a wonderfully imaginative accountant, he has failed dismally as Minister for Finance. I hope that whoever takes over the financing of the National Development Finance Agency will be much more honest and transparent in his or her business dealings. As elected Members, we should be told what is going on.

Mr. Ring:

I am glad the Minister, Deputy McDowell, is here this evening. He received a very soft interview from Marian Finucane on RTE Radio 1 this morning. It is obvious that she really likes the Minister, as I remember that Nora Owen did not receive as warm a welcome when she was interviewed by Marian Finucane as Minister for Justice.

An Leas-Cheann Comhairle:

Is this related to the Bill before the House?

Mr. Ring:

I am mentioning the interview as a means of leading in to my discussion of the Bill. I am glad the Minister for Justice, Equality and Law Reform is so popular in RTE. He had a soft interview this morning.

Mr. Durkan:

The next one will not be soft.

Mr. Ring:

The name of this Bill should refer to the fact that it is being introduced as part of the Government's attempts to get out of the mess it has made of the country. Perhaps it should reflect the Government's concerns about how it is going to get money.

Deputy Perry was correct to say that past financial troubles, similar to those we face at present, were blamed on Fine Gael if we happened to have been in Government for a short time. We always came in to clean up the mess made by Fianna Fáil, but we were lucky, in a way, that we did not get into Government on this occasion. Fianna Fáil, the party that created the mess, has to deal with it. In all my time in politics, no Administration has ever mishandled the public finances to the same extent as this Government.

The squandering of money in this country in recent times has been outrageous. If a company in the United States or Australia was experiencing a downturn in its business of the nature we are encountering and was looking for ways of saving money, would it do what the Government has done in terms of recruitment to the health boards and local authorities? The Government's local government initiative, entitled Better Local Government, involved new buildings and extra staff and has cost taxpayers a fortune. Despite the new officers, the standard of service has remained poor. I asked a parliamentary question last week about the increases in local authority staff throughout the State and I discovered that the local authority is probably the greatest employer in many counties. Allergen employs 1,000 people in Westport, but it does not employ as many people as Mayo County Council, which has increased its staff numbers by nearly 400 in the past three years.

I challenge the Minister, Deputy McDowell, or a member of his staff, to telephone Mayo County Council tomorrow, because I guarantee he will have difficulty finding somebody to help him. The officials will be out looking at new offices in new buildings. Some of them may be looking for furniture to put in the offices. The sad thing is that taxpayers are paying for it.

Mr. McDowell:

Does the Deputy want the officials to be sacked?

Mr. Ring:

No, but I am not afraid to say that I would like to see value for money. I want the Minister for the Environment and Local Government to do his job and his officials to check what local authority workers are doing to earn the money they are paid. I want the Government to explain how services have improved since the introduction of Better Local Government, as I think we have received poor value for money.

I am disappointed that the Minister, Deputy McDowell, is leaving because I have a few things to say about the Progressive Democrats that I would not like to say in his absence. The Minister of State, Deputy Treacy, is from my part of the country and he will understand the points I have to make about roads in the west. He knows what happens when the Taoiseach comes to County Mayo.

Minister of State at the Department of Agriculture and Food (Mr. Treacy):

Everybody is very pleased when he visits.

Mr. Ring:

Does the Minister of State know what he does? He flies into Knock Airport as he is ashamed to use the N5 national primary route between Longford and Westport because it is a disgrace and an embarrassment. The Government is embarrassed by the road.

Mr. Treacy:

Surely the Deputy is anxious that the Taoiseach should use the great facility at Knock Airport.

Mr. Ring:

I would like him to use the facility, but I would also like him to use the roads from time to time. How can he understand the state of the roads if he flies in and out of Knock?

Mr. Treacy:

Monsignor Horan would not be pleased; may he rest in peace.

Mr. Ring:

It embarrasses me when I have to tell people that the Taoiseach, who is in Croke Park every second day and who goes to marts and pubs—

Mr. Treacy:

He played there.

Mr. Ring:

—will do anything and meet anyone, but he will not look at the roads that the people of County Mayo have to use every day.

This Bill relates to how we should spend our money, but I want to know the Government's priorities for the west. I know what this Bill is all about, although I hate saying it because my friends and the ushers think I am always complaining about Dublin. I have nothing against Dublin and I like Dublin people. Many Dublin people tell those of us from the west how we should live, even though they have made a mess of Dublin. One cannot move freely across Dublin. A Deputy told me this morning that it takes him nearly three hours to travel seven miles to this House each morning. It is not good enough.

Mr. Treacy:

It is as a result of our economic success.

Mr. Ring:

I invite the Minister to talk about economic success to the thousands of commuters who are trying to travel home this evening, but who cannot get across the city because of the poor DART service or the level of traffic congestion. The Government has made a mess of Dublin's transport services, as the Minister of State knows. The people know it too and they are waiting in the long grass for the Government.

I wish to return to the N5 and the lack of infrastructure in the west. This Bill is about how to get money to deal with the traffic problems in Dublin and along the roads in and out of Dublin, but it is not concerned with rural Ireland, especially the west. Those involved in implementing the Bill are interested in going to rural Ireland only on holidays or to do some shooting. As the Minister of State at the Department of Agriculture and Food, Deputy Treacy, knows, sheep farmers and small farmers are going out of business. European policy, supported by the Government, is encouraging people to leave rural Ireland on a daily basis.

Mr. Treacy:

No, we are moderating the consumption of grass.

Mr. Ring:

It is not right. The Government should come clean and tell the people of the west to pack their bags and move to Dublin, thereby causing further congestion.

Mr. Treacy:

Did we all not move here?

Mr. Ring:

The Government should tell us all to get out if that is what it wants us to do. I know that the Minister of State and his builder friends in Dublin will want to go to rural Ireland on shooting weekends, or whatever it is they do. Such people are great for telling us there is no planning in rural Ireland, but they do not want anyone to live in rural Ireland. The Minister of State, Deputy Treacy, has to admit that the Government's policy during the past five years supports such ideas. No money has been allocated to improve the N5. The plans to improve the national primary route between Westport and Castlebar were scuttled by the National Roads Authority last week.

Mr. Treacy:

Castlebar has the best roads in Ireland.

Mr. Ring:

When Nealon's Guide to the 29th Dáil & Seanad was published last week, I checked every constituency to see if any representatives of the National Roads Authority were elected to the Oireachtas. Although they all failed to be elected, when I put down a Dáil question about the road between Westport and Castlebar last week I was told the matter was not the responsibility of the Minister, but of the National Roads Authority. After this Bill has been passed, we will be told all infrastructural matters are not the responsibility of the Minister when we raise them in the House.

I was hoping the Minister, Deputy McDowell, would be present to hear me raise the matter of answers to queries made in this House. The day is coming when this House will not matter anymore. If the Minister of State, Deputy Treacy, has to announce new legislation in the morning, he will do so on "Morning Ireland" rather than in this House.

Mr. Treacy:

I have never done that in the 20 years I have been in this House.

Mr. Ring:

He will get his spin doctor to put a spin on it and elected representatives in this House will be the last people to hear about it. The time has come for every State agency, including county councils and health boards, to be answerable to this House. They walk away and refuse to answer questions, however. I realise he is only a Minister of State, but perhaps Deputy Treacy will be able to answer a simple question I put down this week. Are Ministers and Ministers of State exempt from the penalty points system? I will have to make a request under the Freedom of Information Act, 1997, to find out the answer to this question. Are senior Ministers in State cars travelling from Dublin to Galway or Mayo exempt from the penalty points system? Will the Minister answer the question?

Mr. Treacy:

I can only account for myself. I am not exempt, as a citizen of the State.

Mr. Ring:

I knew the Minister could not answer. Will you, a Cheann Comhairle, ask the Minister whether State cars, paid for by the taxpayer, are exempt from the penalty points system? I put down two questions and now I have to waste taxpayers' money by finding out the answer under the Freedom of Information Act, 1997. Why could the Minister not answer me in a parliamentary question and say "Yes" or "No"? We will not talk about that tonight, however.

Mr. Treacy:

I am not exempt.

Mr. Ring:

I heard a junior Minister tell us this evening that we would be provided with gas in Castlebar, Westport and every part of County Mayo. He is wrong. Bord Gáis tells me that if the gas comes out at all it will be brought into Ballina, up to Sligo, to Northern Ireland and over to Scotland. The Minister is a west of Ireland man, yet he will not provide the funding for a bit of infrastructure to be put in place so that the gas can be supplied to the area from which it comes. This is a natural resource in the west of Ireland and we are asking the Minister to provide the funding to pipe it into Castlebar, Westport and every town in County Mayo: to give us, for once, a small advantage so that if industrialists come to the county they can find something that is cheaper than elsewhere. It is a reasonable request. We sold away the rights to this gas. We gave it to big business and to people outside the State. We have almost no control over it ourselves. We will only have control if the Minister gives money to Bord Gáis to provide the service – to pipe the gas into every town and village in counties Mayo, Galway, Sligo or Leitrim. For once the west of Ireland should be given an advantage.

If this famous agency ever gets up and running it will have officials from all parts of County Dublin saying these things are not viable. Like the roads in the west, it is not viable. That will be their answer. Of course, they will not have to come into this House to say it. They will write that to the Minister, who will write to me and say that he has no responsibility for this. That is why I am against it. It is a way out for the Government, which has squandered every single penny.

In my own county last night nine people were on the corridors of Mayo General Hospital, where there was not even a bed for them. Is that not a disgrace? Is it not outrageous that we spend billions on spin doctors and consultants' reports when poor people are lying on trolleys in hospitals? People out there will make their voices heard when they get the opportunity. The spin doctors spun well in May and they certainly codded the people.

I will give credit where it is due to the former Minister for Public Enterprise, Senator O'Rourke. We had a disastrous rail service in the west for many years. Now the lines have been improved – the tracks have been put in place – but we do not have the trains. We do have some Third World trains that have been sent to the west over the last number of years. Iarnród Éireann has now decided that it will not carry freight to or from the west of Ireland. The roads from Dublin to Mayo, Cork, Kerry or wherever are clogged up every day with lorries holding up the traffic. A person can leave Mayo, Cork or Kerry at any hour of the day or night and see lorries bringing goods in and out of Dublin city. If we had a proper policy on freight this would not be happening. It would not be happening if we had a Minister who took control of his Department and brought in the necessary legislation to make sure that Iarnród Éireann carries freight in and out of County Mayo.

I heard a previous speaker refer to a company, Allergan, which employs almost 1,000 people in my town. When this company sends goods from my town to Dublin and abroad, the complaint is regularly sent back that the goods have been damaged. They get damaged between Westport and Longford. After Longford the road to Dublin is not so bad but from Longford to Westport it is a Third World road. This is not right. We deserve the same kind of infrastructure as any other part of the country. I travelled recently to Cork and to Wexford and saw fine motorways. Last year there were traffic lights in Strokestown. It was not that there was so much traffic going in and out, but that two cars could not be allowed to pass each other on a national primary route because it was dangerous. The traffic lights were there to make sure that only one car went up and down the road. That is not right.

Mr. Durkan:

One car only.

Mr. Ring:

What would the Minister call that? Would he say it was good?

Mr. Treacy:

I would call it single line traffic.

Mr. Durkan:

That is progress.

Mr. Ring:

Progress is right. I remember the day I was behind the Taoiseach and his entourage: he had about six cars flying through. They got through the traffic lights, motorbikes and all, and everybody had to step aside. That was wrong. I do not expect Ministers to drive – they should have State cars – but I would expect them now and then to hop into their own cars and drive from Dublin at 11 a.m.—

Mr. Treacy:

I do it every weekend.

Mr. Ring:

The Minister of State is being driven.

What is in the Bill for the west of Ireland? Is this to be the Dublin Bill? We have no roads; we are begging the Government every day for sewerage schemes and new schools. I compliment the Minister of State and his colleagues on the great job done by the spin doctors before the election on the website.

When one writes to the Minister for Education and Science one is told to look at the website. That Minister has certainly advanced. The trouble is that many people in rural Ireland have never seen a website; the only web they have seen is a cobweb. According to the website, 20 schools were awaiting approval. That was before the deadline in May. What went on in May? Not May Day – I am talking about the general election.

Mr. Treacy:

A great day.

Mr. Ring:

The election has come and gone and so have these schools, but many of them are gone – taken out of the list, not built, not advanced, not even gone to tender.

Mr. Durkan:

That is awful. It is disgraceful.

Mr. Ring:

The people have been let down again and now we are attending public meetings on a regular basis. Who is to be targeted next? The poor people on FÁS schemes. Where the council had failed and the Government had failed, these people were trying to keep their communities alive and clean. They were trying to retrain people and get them back into the workforce, but the PD Minister does not like FÁS schemes and she does not like rural Ireland either. People who were able to train themselves and do some good work for the community have been attacked. The next attack – I know some journalists do not like what I am saying – was on the home help service. The poor creatures at home with no-one to look after them, except for a few hours a day, were attacked by central government. I do not know what this Bill will do for them. Will anything be done? Will we be able to borrow more money from rich people? There are people depending on the home help service while Alex Ferguson's horse – I am not a horsey man, I cannot even think of its name—

Deputies:

Rock of Gibraltar.

Mr. Ring:

Rock of Gibraltar is going out to stud shortly and his earnings will all be tax free for Mr. Ferguson. The poor old devil is not well paid by Manchester United. He is probably only on about a million a year. He needs the tax break. I know the Minister for Finance likes the races and betting and he has good friends in the racing circle. We will see next week whether he taxes these people.

Mr. Treacy:

He is a good man.

Mr. Ring:

I hope he taxes them and puts plenty of tax on them, because these are the people who have gained from this Government. These are the people that want better infrastructure so they can drive their big Mercs up and down from Kildare to the race meetings. They do not want to be held up: they want to get through as fast as possible. They do not care how the other half lives as long as the Government looks after them. I compliment the Minister of State. The rich have got richer, the poor have got poorer and the middle class has been squeezed by this Government.

Mr. Treacy:

That is not true. Read Dr. Nolan's report. Does Deputy Durkan agree with that?

Mr. Ring:

I speak for the west.

Mr. Treacy:

When the Deputy's party was in Government it did nothing.

Mr. Ring:

In the morning, when the Taoiseach wants to travel, he will ring AA Roadwatch and ask how the roads are. He will be told that there are traffic jams everywhere. What will happen then? He will jump into the helicopter and it will bring him wherever he wants to go. How could that man realise what is happening on the ground when he travels like that, in helicopters and State cars? Why does he not take out his own car and drive to Cork or Kerry? He is off tomorrow, since he now seems to be on a FÁS scheme, with a day on then a day off. Why does he not drive to Cork or Kerry tomorrow to see how commuters suffer on a daily basis?

I welcome funding for infrastructure. I would have said more if the Minister of State had not interrupted me so often. The Government's rich friends in the building industry—

Mr. Treacy:

Many of them are good Mayo builders.

Mr. Ring:

They did not do too badly in Dublin from some former Ministers. They built a lot of houses, they might not have been paid for them all but they did not do too badly. It is time the Minister of State and I got together with the backbenchers of Fianna Fáil and Fine Gael and put pressure on the Government, no matter what form it takes, to ensure infrastructure is put in place in the west to bring us up to standard and give us a chance.

Mr. J. Higgins:

I am opposed to the National Development Finance Agency Bill, 2002. It is nothing more than a thinly disguised project to provide for major privatisation of crucial public utilities and services.

The explanatory memoranda to the Bill states that it is to provide for the cost effective financing for priority infrastructure as an alternative to up-front Exchequer funding or "unsuitable" private sector funding. Unsuitable private sector funding by its very definition could not be used. The development agency provided for here will find alternatives to public funding. It will push aside public funding in key infrastructural projects and services so that private capitalists can move in, take over and make a killing in the process.

This Bill is from the top drawer of IBEC. Chris Dooley, industry and employment correspondent of The Irish Times, writing on 11 November, stated:

Employers have called for "as many Government services as possible" to be outsourced to the private sector as part of a new national partnership agreement.

In talks with the other social partners, IBEC has also called for the transport and energy markets to liberalised as a priority action in dealing with inflation.

In other words, it wants to privatise the buses, the rail network and ESB. The article also states:

As part of a ten-point plan to tackle inflation, it said as many Government services as possible should be outsourced to the private sector, should be "fast-tracked" through greater use of public-private partnerships.

That is the IBEC programme and that is the programme the Minister for Finance is presenting to us in this Bill. The bosses command and the Minister for Finance dances to attention. That it why the National Development Finance Agency Bill is before the House.

How can finance from private capitalists be more cost effective than the State for public projects since the State can raise funds more cheaply than anyone else? Private capitalists will want a substantial return on whatever funds they will put in. That return will be paid by the taxpayer, squeezed out of the citizen, in road tolls and the like.

The best known example of public private partnership is the West-Link toll bridge in my constituency. It was built several years ago by a private company. It has turned into a gold mine for National Toll Roads, the company that built and operates it. In the last figures available on its website, in the first six months of 2000, it had profits of €9.3 million. That is paid for by hard pressed motorists, usually workers going to and from work, who already pay significant taxes as PAYE workers, are taxed on the cars they are obliged to drive because of the abysmal nature of public transport and on the fuel they consume in their cars. To get to work, however, they are further held to ransom by this private company.

The effects of this project are entirely anti-social. The West-Link toll bridge is the biggest obstacle to traffic flow in Dublin. Hard pressed workers, after a hard day, have to sit in queues from the West-Link toll bridge all the way back to Finglas if they are going south. The converse must be endured on the way to work. This is the reality of what is being provided for in the National Development Finance Agency Bill. The Government wants to replicate the West-Link toll bridge in bypasses and bridges around the country and hold to ransom the people in the provinces as much as those in Dublin.

Some of the examples of public private partnership, which is at an early stage in some crucial services, bear out the utter impracticality of the idea. It will not work. It will not provide the quality services it is supposed to provide. I predict there will be chaos in areas of the public sector such as education into which it is now being extended.

The Minister for Education and Science has a public private partnership project, signed in November 2001 with Jarvis Projects Limited, to design, build, finance and operate five schools. The capital cost of the schools is €60.64 million and the Minister is entering into a 20 year contract with this firm to service these schools. He is providing at this stage a total of €244 million for that purpose. Projecting in advance in this way is absolutely ludicrous. As happened in Britain, public private partnerships, or the private finance initiative as it is often called there, will be a rip-off of the public purse and taxpayers and a source of unending frustration to the communities depending on these services.

We know that much more is coming down the road in this regard. During the course of the Nice treaty debate, I highlighted on behalf of the Socialist Party, as did others, the drive by the EU Commission to introduce a regime of widespread privatisation of crucial public utilities and services such as water, the post office, electricity and so on. Following ratification of the Nice treaty, the EU Commission will be in negotiations with the World Trade Organisation to bring about a situation where there will be massive pressure on this State and other states to privatise crucial services, such as water services, that the Irish people would not even think of removing from public hands.

Surely we should learn from the rip-off which is occurring in Britain and which is a source of scandal on an increasingly frequent basis in that jurisdiction. My Socialist Party colleague and former Member of Parliament, Councillor Dave Nellist, brought to my attention an instructive example. He is currently a councillor in Coventry. Some ten years ago plans were drawn up to fully modernise two national health service hospitals in the Coventry area at a cost of £60 million. The Tory Government then went on its binge of public finance initiatives – privatisation in reality – and it was decided in that context to build one hospital by a private company, which would be privately owned and then leased back to the National Health Service for the following 30 years. The price then began to increase relentlessly. In April 1999, the figure put on the project was £174 million. Some time later it was £290 million and now it is to be built for a price put by the builders of approximately £370 million. Therefore, my colleague summarises the farce, except it is at the expense of British taxpayers and the sick. In a few short years they have gone from two public National Health Service hospitals to a proposal for a single privately-owned hospital, leased to the National Health Service, with less beds, less staff, in a location no one wants and so far costing more than six times the price of modernisation of our two hospitals. He concludes by saying, "No wonder PFI stands for profits from illness."

That is the reality of what the whole process is about. The process is about milking the public purse and, despite all that is said in the Bill about the provision for special purpose companies and the declaration that these special companies will not be able to call on the Exchequer for any bad debts and so on, it is inevitable that down the line taxpayers will have to bail out these projects which will go on the rocks. What we will have is a severe deterioration in services because the thrust of whatever private company is involved in the design, build and operation of crucial utilities will be to maximise private profit and a return to shareholders who very often are multinational corporations, big financial institutions and so on. That is their raison d'être, not to provide public services for ordinary people in society to the best extent possible.

Moving on to some of the specific provisions in the Bill, the board of the national development finance agency, if set up, will be appointed by the Minister for Finance. Given the Minister for Finance and the Government we have at present who are absolutely wedded to privatisation, the ethos of private capitalism and domination by multinational corporations, there will be appointed to that board primarily representatives of big business and people who share the right-wing ideology of the Minister. I am amazed at the weakness of the provision in the Bill which provides for the arising of a conflict of interest. Of course, there is an absolutely fundamental conflict of interest in having big business representatives on the national development finance agency board when as private capitalists they have a vested interest in steering as much of these projects as possible in their direction and at terms favourable to private capital.

Should the conflict of interest be proved to have arisen in a specific sense, apart from the general conflict of interest, section 15 does not lay out any disciplinary code or disciplinary measures whatsoever for a board member, or indeed for staff or other senior people, shown to have a conflict of interest. In regard to senior staff or others, the Bill states that the Minister for Finance will decide appropriate action. Why is the consequence of a conflict of interest not provided for in the Bill?

There is a further extraordinary section 18, which is amazing and must be changed. It provides that the board of the national development finance agency can be questioned by the Committee of Public Accounts. However, section 18(7) states:

The Chief Executive Officer and the Chairperson, if required under subsection (6) to give evidence, shall not:

(a) question or express an opinion on the merits of any policy of the Government or a Minister of the Government or the Attorney General or on the merits of the objectives of such a policy, or

(b) produce or send to a committee a specified document in which the Chief Executive Officer or the Chairperson questions or expresses an opinion on the merits of any such policy or such objectives.

This is absolutely extraordinary. This is supposed to be one of the most powerful committees of Dáil Éireann which represents taxpayers. However, the chief executive officer of this agency, that is to have control of up to €5 billion in funding, will not be able to say to elected representatives that a policy the Minister obliges them to carry out is bad value for money or is not in the interests of the taxpayer. If this happened in a Stalinist society, it would be called heavy-handed. It has to go.

Bille náireach eile ón Rialtas is ea an Bille um Ghníomhaireacht Airgeadais d'Fhorbairt Náisiúnta, 2002, a bhfuil fealsúnacht an eite dheis agus fealsúnacht an Aire Airgeadais le fáil thar cuimse ann. Bille é a dhéanann maoin an phobail a dhíriú i dtreo lucht mór ghnó agus lucht an rachmais phríobháidigh. Tugann an Bille seirbhísí phoiblí, atá thar a bheith riachtanach do mhuintir na tíre, do lucht mór gnó i dtreo is gur féidir leo an oiread brabúis agus is féidir a tharraingt astu. Tá an Rialtas ag iarraidh a rá linn go bhfuil seo ar mhaithe leis na seirbhísí seo agus ar mhaithe le muintir na tíre. Níl sé sin fíor ar chor ar bith.

An mhalairt a mholfainn do sin ná go ndéanfaí seirbhísí phoiblí a fhorbairt in úinéireacht poiblí ach le córas daonlathach ina dtabharfaí an lucht oibre, go speisialta, go lár baill na gcomhluchtaí agus na seirbhísí úd i dtreo is gur féidir linn seirbhís de shaghas nua agus de chaighdeán árd a chur ar fáil dár ndaoine. Sin í an mhalairt, seachas tuilleadh airgid agus tuilleadh cánach mhuintir na hÉireann a thabhairt do mhionlach bheag, sé sin an lucht gnó atá báúil don Rialtas.

Mr. Durkan:

Other speakers have referred to this Bill in various ways to describe what it is supposed to do. However, we all know what it is really meant to do. In 1977, the incoming Government went on a spending splurge the like of which had not been known previously. That came to a sudden halt in less than two years when, like a locomotive, it ran into a solid buffer wall.

Mr. Treacy:

The Deputy was a young man then. Does he remember the offers made by the Government in that period?

Mr. Durkan:

Ironically, the outgoing Government in 1997 had left the country in good running order. All of the economic fundamentals were right but the 1977 spending splurge was ultimately referred to by the present Minister for Finance as a debacle that he did not contribute to. He said that it was badly thought out, a terrible thing to do and should never have happened. At the same time, he coyly admitted that some of his colleagues were elected to this House on the back of it. I presume that served his purpose.

Mr. Treacy:

We came in.

Mr. Durkan:

The incoming 1977 Government's slogan was: "Put more money in people's pockets." It did not say that it was going to shove its hand back into the pockets to take the money back out. That was the slogan and the people paid a heavy price for it.

In 1987, a similar scenario came about. This time the slogan was: "There is a better way."

Mr. Treacy:

There is.

Mr. Durkan:

There is, and the people know that now. However, the better way was not as easy to find as the incoming 1987 Government had thought while it was in Opposition. It was a difficult way and the better way became the hatchet. After that, everything was happy and quiet until 1997. The slogan then was: "People before politics." The Government kept its eye on the people all the time. Whatever the public was up to, the organisation across the House had its eye on them all the time. The 1997 Government drew up a five year plan to cod the people out of their money once again. During that five years – and this is what I mean by giving out money then putting a hand back in people's pockets to get it back again – the Government sold to the people and taxpayers something they already owned – Eircom. It was sold for more than €3 billion.

Mr. Treacy:

Not only taxpayers bought shares.

Mr. Durkan:

The unfortunate people who thought they were subscribing to a national institution, and who wanted to support the infrastructure of the State, received a letter telling them they must sell their shares at the price the company offered.

Mr. Treacy:

And you will pay them for it.

Mr. Durkan:

You paid other taxpayers because people in the commercial sector could claim tax relief.

An Leas-Cheann Comhairle:

Deputies should direct their remarks through the Chair.

Mr. Durkan:

I will make my accusations through the Chair. Lest you feel accused, a Leas-Cheann Comhairle, I was directing my remarks across the House. I am delighted to see my constituency colleague, the Minister for Finance, arriving in the House. I do not have to regale him with what he said about 1977 because he remembers well what he said, and fully agrees with me.

I was discussing how the Government put its hands into people's pockets to get their ill-gotten gains, as the Government saw it. After Eircom was sold, it was time to go after the people again. Lest the people get over-elated about the profits they expected to make as a result of investing in a national institution, the Government said it wanted that money. Another organisation sent letters in the post to tell shareholders that they must sell their shares at roughly 40% of the price paid for them.

That was a nice way to treat the public. Having conned them into the purchase of the shares, which they already owned as it was a State company, the new company said that the shares had to be sold. I can understand how the Opposition was perplexed.

Mr. Treacy:

The Opposition is still perplexed.

Mr. Durkan:

The Opposition did not know what the Government had in mind then, but it is alert now. This has been done so often by the Government that it cannot be done again, or, if it is, it will be known.

That part of the plan worked well. Various speakers have mentioned the trick that followed, which was to keep people in the dark for as long as possible – the mushroom factor. A former constituency colleague of Deputy McCreevy, Mr. Paddy Power, used to tell a great story about the mushroom factor.

Mr. Treacy:

He is a great man.

Mr. Durkan:

The purpose of the mushroom factor is to keep the people in the dark as long as possible; they are not to know the true circumstances until well after the election. However, something misfired and about a week after the election Ministers began to feel uneasy. There was a noticeable shifting of feet and lack of exuberance in the way they went about their business. I thought they had gone silent on the economy because they had caught a cold or some other malady had befallen them. Before the election we were told we had the best economy in the world and the fundamentals were in place. Two years before, when the European Commission warned that we were overspending, the Government said it was not the case and the Commission was interfering.

Mr. McCreevy:

The European Commission did not say that.

Mr. Durkan:

The European Central Bank was concerned about it, as were financial commentators here. The Government had been so successful in pursuing high growth rates and spending it thought it would work forever. Like all fairy tales it came to a sad and sorry end.

Mr. McCreevy:

The Deputy and his colleagues will have five years to work it out.

Mr. Durkan:

The Government may think it has five years, but it will be a long five years and it will be wishing it was over long before the end.

There were a huge number of proposals before the election but this was followed with coyness. The schools were to be rebuilt and refurbished but the same commitment was not there after the election. The Opposition did not know why that was the case, but it does now. The Opposition now knows the money had run out. A €2 billion plus surplus became a €1 billion deficit in a short space of time.

Mr. Treacy:

This is not the only country to experience this.

Mr. Durkan:

Most economists world-wide marvelled at how quickly the Irish economy transformed from a surplus to a deficit. In various arenas, many more capable people than me are trying to work out what happened, how it happened, and what its purposes were. The purpose was to get past the general election at all costs.

Following the general election of 1977 and all its attendant baggage, the Government established a National Treasury Management Agency to look after some things that had gone wrong. The NTMA has worked quite well and done a good job. In this case a new way of thinking has been uncovered. This time, in anticipation of its future electoral intentions, the Government has established a new agency that it will be able to blame when the planning and economic thinking goes wrong. No responsibility will fall on the Opposition, Fianna Fáil or the protectors of the national economic interest, the Progressive Democrats – the watchdog that has neither teeth nor bark – because the agency will take the responsibility. The agency will not be answerable to this House – past agencies were – and the ultimate quango is about to unfold. This agency will be given the responsibility of doing the dirty work for which Ministers do not want to be held politically accountable. This is a dangerous development and one that is intended to mislead the people. The people have been led astray for long enough by those on the Government benches. They were led astray in 1977 and again in 1997. It is unfair of the Government to ask the public to have any more patience with it. The public does not want the Opposition to give its imprimatur to the establishment of an agency to cover-up future mistakes.

Mr. Deenihan:

I have listened to a number of Deputies relating the Bill to their constituencies, drawing on the various deficits those constituencies have and wondering what it will do for this. When this was first mooted, a headline in The Irish Times on 26 April read: “Fianna Fáil boxes clever with big idea of finance agency.” Denis Coghlan, that newspaper's political correspondent wrote: “There was a touch of McCreevy magic about the Development Finance Agency idea”. This is a clever way of borrowing money without it being seen as Exchequer borrowing. In principle it looks fine, this agency will function through the NTMA, but could not the Minister have created a mechanism or committee of the NTMA to carry out the functions of the national development finance agency?

Whereas I agree with all speakers that there is a need to find money to fund various projects, I cannot see this body making much difference. I know it will enable the borrowing of a lot of money, but I do not know that it will provide the necessary finance to help peripheral areas. Deputy Ring referred to the lack of infrastructure in the west and called on the Minister of State, Deputy Treacy, and other western backbenchers—

Mr. Treacy:

I thought he said he was going to join us.

Mr. Deenihan:

No, he called on Deputy Treacy to join him. If money is to be borrowed the projects it will be spent on will be based in Dublin and on the east coast.

I look forward to expanding upon my argument at another opportunity.

Debate adjourned.