Enda Kenny
Question:1 Mr. Kenny asked the Taoiseach if he will report on the May 2003 meeting of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [15221/03]
Ceisteanna – Questions. - Interdepartmental Committees.
Trevor Sargent
Question:2 Mr. Sargent asked the Taoiseach if he will report on the May 2003 meeting of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [16664/03]
Joe Higgins
Question:3 Mr. J. Higgins asked the Taoiseach if he will report on the most recent meeting of the cross-departmental team on infrastructure and public private partnerships. [16763/03]
Enda Kenny
Question:4 Mr. Kenny asked the Taoiseach if he will report on the May 2003 meeting of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [17371/03]
Pat Rabbitte
Question:5 Mr. Rabbitte asked the Taoiseach if he will report on the current work programme of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [17498/03]
Caoimhghín Ó Caoláin
Question:6 Caoimhghín Ó Caoláin asked the Taoiseach if he will report on the last meeting of the cross-departmental team on infrastructure and public private partnerships; and the programme of work of the team. [18251/03]
Caoimhghín Ó Caoláin
Question:7 Caoimhghín Ó Caoláin asked the Taoiseach if he will report on the most recent meeting of the cross-departmental team on infrastructure and public private partnerships. [18601/03]
I propose to take Questions Nos. 1 to 7, inclusive, together.
As I have indicated to the House on previous occasions, the cross-departmental team on housing, infrastructure and PPPs usually meets every month. At the May meeting, the team's deliberations were focused on the national strategy on broadband telecommunications. The most recent meeting of the team took place on 11 June. The principal items considered were waste management and preparations for the visit by Professor Maynar.
The purpose of Professor Maynar's visit was to advise the Government on the Madrid metro extension project by reference to the ongoing deliberations on a possible metro system for Dublin. The next meeting of the cross-departmental team is scheduled for 9 July, with the main agenda items being energy policy and the mid-term review of the national development plan.
Arising from that, I ask the Taoiseach, first, who the Government blames for the gross overestimation of the cost of the metro project. Is the Taoiseach now confident that, following the visit of the Spanish engineer and professor, €2 billion has been cut off the estimated cost? Is he happy with his cross-departmental team and that this kind of grossly inflated cost factor is not built into all the major construction projects that are required around the country?
Second, the Institute of Industrial Engineers recently commented very unfavourably on the national development plan, suggesting that it was years behind time and would not be completed until 2013. Does the Taoiseach feel that it is now time to have a real review of the national development plan to see what priorities can and will be delivered on budget and on time, rather than having a list of aspirations that will clearly not be met within the planned timetable?
As Deputy Kenny knows, no decision has yet been taken by the Government on the metro. The position is that on foot of a Government decision, the Railway Procurement Agency undertook an assessment of the various options around the metro system in Dublin. Following a visit by the Minister for Transport to Madrid in February or March, and a follow-up visit by senior officials, the RPA has just completed a revised proposal which it has put to Government for consideration.
Drawing on the Madrid metro experience, the revised proposal involves a significant decrease in the original estimate that was put. The original estimate was a fairly rough assessment by the RPA, but there was an enormous difference between that and the revised estimate. In light of the revised RPA proposal and the insight provided by Professor Maynar in the course of his visit to Dublin, further consideration will be given to the proposal for a metro system linking the airport to the city centre. As of now, the metro project for Dublin has neither been ruled in nor out.
In relation to the national development plan, a review is scheduled this year in any case. That was built into the project covering the period 2000-06. As I previously said, the report of the Institute of Industrial Engineers has many very positive things to say about infrastructure, but it states that there has been a falling behind on some of the projects. As I previously stated, quite an amount of the resources in terms of the design by engineers and others in the construction team led to high price inflation, which eat into the original cost indicated. That has been the main, although not the only, cause for the delays.
I thank the Taoiseach for his reply. I know that the Minister, Deputy Brennan, is trying to do the best he can in difficult circumstances and everybody wants these matters sorted. Is it not a fact that in 1997 the Government inherited a Luas project which was ready to roll and its cost had been estimated? The project is now four years behind time, its budget has trebled, the company selected to run it has lost its rail contract in the UK and the timescales set for it will not be met.
I wish to ask the Taoiseach two questions on this matter. Is it a fact that the lines from Sandyford and Tallaght will not be available until autumn 2004 at the earliest? Is it the case that the two lines being built are not to the same gauge and that even if they were to be joined eventually, the trams from one line could not be used on the other line? If it is the case that we will have two tram lines unconnected and that if they were connected the trams from one line could not run on the other, that would be a ludicrous form of engineering. I am not sure who is responsible for this, if that is true. Can the Taoiseach confirm if that ridiculous notion is true?
Detailed questions on this matter would be more appropriate to the Minister responsible, the Minister for Transport.
The Taoiseach said that the last matter discussed was the metro.
I appreciate that—
My question is not a very detailed one and the Taoiseach knows about this.
—but the Chair has ruled continuously that detailed questions should be directed to the appropriate Minister.
My two questions are whether the lines will not be available until autumn 2004 and whether they are built to the same gauge?
The Sandyford line will be ready this time next year. Work on the other line is a little behind but I understand it will be ready in August. The two lines should be available next summer to early autumn. On the issue of the gauge, the two lines are of the same gauge. The suggestion that trains from the two lines will not be interchangeable is totally incorrect. The trams on the Sandyford line will be 40 metres in length; the St. Stephen's Green line will have 14 trams in total and the trams will be 30 metres in length; and there will be 26 trams on the Tallaght-Connolly line. The difference in length of the trams is related to projected passenger numbers on each route, but the lines are of the same gauge.
Does the Taoiseach agree that the experience of public private partnerships, particularly in the transport area, has not been good to date? As Deputy Kenny indicated the estimated cost of the Luas has escalated in six years from €288 million to nearly €800 million, which is made up of €691 million plus a risk provision of €90 million. Does the Taoiseach agree that the experience of the mini-CTC signalling system and now of dealing with a company which has been found to be incompetent in England in terms of management of rail services does not bode well for continuing reliance on public private partnerships in the public transport area? Will he learn any lessons from the experience in the UK where British Rail in 1989-90 got a subsidy of £885 million in real terms whereas in 2003-04 the subsidy to private rail operators is in the order of £3.8 billion?
Given the concerns people have about following that particular model, will he indicate what type of contract the Government has with Connex, which is currently the subject of considerable media reporting? Does the Government have an opt-out clause if Connex does not perform satisfactorily? Would he see merit in having some type of public sector price comparator in relation to public transport projects in general to compare whether perhaps there is more merit in using the pension reserve fund to publicly fund some of these major infrastructural projects rather than look to a company which, from its UK experience, is not up to scratch?
The original €288 million pertained to the old design that changed totally over the period in question and which was subject to the public inquiry into the length of the Sandyford line and other matters. It is not a relevant cost. The relevant cost now is €80 million to €90 million. That is more than the contract price, but it was in the contingency figure. I do not believe there is any great difficulty in this respect.
Public private partnerships can be structured in different ways. We have had some successful ones – it is a question of structure. We have had successes in respect of some of the roads, schools and waste water projects. It has been on different contracts—
Only some.
As I stated previously to Deputy Sargent and the House, the return required on some projects is high and not of great value. The Department of Finance and the National Treasury Management Agency would argue that it is always easier for the State to borrow. This always has to be considered. However, as we saw in respect of the Madrid metro and other projects throughout Europe, ways were found to arrange such issues outside of the growth and stability pact. Countries that adopt this approach do so on the basis of public private partnerships. They could not do so if it was not on this basis.
The Minister for Transport, Deputy Brennan, has made very clear his support for increased investment of the pension reserve fund in various projects. This can only be done if it makes absolute commercial sense because the fund managers have to look after the people's pensions in the longer term. Discussions on this matter are ongoing and I hope they will lead to investment in some of the major infrastructural projects. The Government desires this and it is the brief of the Minister for Transport to try to achieve it.
After a competitive process in compliance with EU tendering rules, the contract for the operation of the Luas system was awarded to Connex by the RPA. Connex is part of a large international conglomerate within the Veolia group and it operates heavy and light rail systems and bus services in more than 100 locations throughout the world, including France, Germany, Sweden, the US and Australia. The UK operation has been subject to controversy, as Deputy Sargent stated, because the Strategic Rail Authority has withdrawn Connex's licence for heavy rail operations.
The contract between the RPA and Connex is performance related, with specifications set in respect of quantity, quality, output and performance. There are tight restrictions, penalties and bonuses, as well as opt-out clauses. Connex will collect fares on the RPA's behalf and these will be set against an agreed fee. Should revenues fall short of the contract sum, the balance will be paid by the RPA, conditional on Connex's performance. The contract includes penalty clauses for failure to meet targets, and bonuses for exceeding them. It was signed in May 2002 and it will be binding for five years from the commencement of the operations.
There is an opt-out.
Yes.
Has the Taoiseach read the review of the Institution of Engineers of Ireland? If so, does he agree that its analysis of the implementation of the national development plan makes for dismal, disturbing reading in that it shows up an incompetence at Government level which is creating problems in terms of time and budget in the delivery of projects? Is he aware that the lack of confidence is now so great that even a Minister of State in his own Department has expressed a loss of faith in projects such as the N11 at Kilmacanogue? Deputy Roche, Minister of State at the Department of Foreign Affairs, is demanding an inquiry into the management of the delivery of the national development plan in this area.
Where is the political leadership behind the national development plan and who in the political arena is responsible for it? Who is responsible for driving it and ensuring that targets are reached? Who is the project manager for the project? Who is the civil servant dedicated on a full-time basis to ensuring that the delivery of this plan is on target and within budget? There is a failure at this point with regard to the Government's competence to ensure that the plan is delivered on. The Institute of Engineers of Ireland has clearly shown that these deficiencies are serious and are not being addressed in any coherent way.
The Deputy is making a statement. We are taking questions.
Members of the Institute of Engineers of Ireland are upset with Members of the Opposition who have been citing parts of their report selectively. The report is complimentary about infrastructural work taking place in this country. Over the period 2000-02, 26 roads projects have been completed, involving 150 km. of road. Some 13 projects have opened up this year, and we have had many major projects which I have noted on the record of the House many times.
The engineers involved were embarrassed at the increase of almost 50% in construction price inflation, not to mind fees, from the start of the NDP to the end of the third year. The roads evaluation, in which the engineers have great interest, shows that there was a 38% increase in tender prices over a very short period of time.
As for the management of the contract, the Department of Finance has a co-ordinating role, but each individual Minister has responsibility for the projects that fall within his or her brief. The cross-departmental team involves officials from a number of Departments who work day-to-day on the projects. We are spending about 5% of GNP on capital programmes, which is about 1.5% higher than in any other European country. Recently, along with Deputy Quinn, I viewed a €300 million project, the occasion being the opening of the final stretch of road on the northern motorway – apart from the Dundalk section, on which work has now commenced.
We are seeing every month the roll-out of projects all over the country. The national development plan has been an enormous success and it will continue right up to the end of 2006. It would be nice to be able to put more resources into these projects, to be even further ahead of our European colleagues, and to compensate for less active periods in the past. That is not possible given the present state of finances. However, in this year's budget, Deputy Brennan was granted a further €209 million for roads alone, bringing road expenditure up to €1.25 billion. That is just one area of the national development plan and there are many others being successfully implemented.
When did responsibility for co-ordinating the national development plan transfer from the Department of the Taoiseach to the Department of Finance? Who is the project manager? There has to be somebody who has a desk upon which the buck stops. Will the Taoiseach tell us who it is?
The Department of Finance was the co-ordinator of the NDP since it was launched in November 1999. I chair the cross-departmental Cabinet team and continue to be responsible for it. There is no single official responsible for projects related to roads, marine, transport or aviation. There is no dictatorial position. Each Minister is responsible for the capital projects within his or her Department. That has always been the case and continues to be so. The Secretary General of each Department and the relevant officials are the Accounting Officers for the various projects. That is the sensible approach. The overall monitoring of the sums spent is co-ordinated by the Department of Finance.
We are told that the Cabinet Committee on Infrastructure and Public Private Partnerships was reconstituted as the Cabinet Committee on Housing, Infrastructure and Public Private Partnerships after the last general election. Would the Taoiseach explain to the House the purpose of that change? Is it the case that the housing element has been a feature of address by the cross-departmental team? Does it mean that housing will have a greater priority as a result of this change? Following the last budget, certainly in respect of social housing, it has been given a less important status given the reduction in funding to local authorities for the provision of social housing.
A question please.
In the context of public private partnerships, will housing be grouped by the Cabinet sub-committee? Is this indicative of housing becoming more the preserve of the private sector? Is the Cabinet considering a reduced role for, or perhaps even the squeezing out of, local authorities in the provision of social housing?
Has the cross-departmental team or the Cabinet sub-committee dealt with the issue of public private partnerships for the construction of incinerators at a number of locations, including Carranstown, despite the well-recorded public disquiet both on health and waste management grounds?
The housing element is included in the scope of the cross-departmental team because it is not possible to build houses without the roads, water and sewerage schemes. The water aspect alone accounts for €4.4 billion. Co-ordinating very large and substantial contracts is better done on a cross-departmental basis. The work in preparing and servicing land along with other initiatives is allowing us to build a record number of houses this year for the eight or ninth year in a row. This year the figure will be about 60,000 houses. The purpose is to give meaningful effect to being able to implement the policy across Departments. Housing always gets the highest priority, which is why we are at the current level of construction across a range of house types.
There have been presentations on incineration and waste water issues. The Deputy should table a question to the relevant Minister.
Arising from the Taoiseach's earlier response on the cross-departmental group on public private partnerships, in which he outlined the items discussed at the June meeting and what will be discussed at the July meeting, to where has the issue of the Cork School of Music disappeared, despite all the promises made by the Taoiseach and his Ministers?
It might be more appropriate if the Deputy tabled a question to the relevant Minister.
It is not appropriate.
We cannot—
A Cheann Comhairle, why am I interrupted by you every time I get up? I am asking about—
The Chair never interrupts. The Chair intervenes; Deputies interrupt occasionally.
I am asking about the cross-departmental committee to which the Taoiseach referred in his earlier response. Why has the Cork School of Music disappeared from the agenda of those meetings, in view of the fact that it is a public private project? Many statements have been made by the Taoiseach and his Ministers that EUROSTAT is blocking the project. EUROSTAT claims it has not been consulted nor has it given an opinion on the project.
Detailed questions on any items should be directed to the Minister responsible.
I am asking the Taoiseach, who is answering questions on the cross-departmental committee—
The Taoiseach is answering in a general way. It would be more appropriate to table detailed questions to the appropriate Minister.
Why has the Cork School of Music disappeared from the agenda and when will it be discussed again? When will the Taoiseach fulfil the promises made before the general election that provision will be made for a new school in time for Cork's year as the European city of culture?
The Deputy is making a statement now.
Students and staff are now working under unbearable conditions in an adjoining hotel. To where has it disappeared?
If the Deputy really wants a detailed answer, the Minister for Education and Science will supply it. This public private partnership proposal has been in the Department of Education and Science for some considerable time. If the Deputy wants all the facts on the current position, he should table a question.
I call Deputy Gilmore.
May I ask a supplementary question? Everybody else was allowed one.
No, Deputy, everyone else did not get to ask a supplementary question. The Deputy has been in since the beginning of questions.
I am asking the question why is this on the cross-departmental agenda?
That is for the Department of Education and Science.
I call on Deputy Gilmore.
The Taoiseach, in his initial reply, said at the meeting on 11 June, one of the two main issues discussed was that of waste management. What waste management projects were the subject of that discussion?
The Deputy would need to put down a parliamentary question for the details of individual projects. What we do in the cross-departmental team is ensure that we move forward the national development plan, but the details of the individual projects are a matter for the line Minister.
I call on Deputy Kenny. I will call Deputy Gilmore later.
The Taoiseach was at the meeting. I do not want a detailed description of every project, just in general terms. There were only two agenda items at the meeting, one of which was waste management. I am sure the Taoiseach can recall whether they discussed landfills, recycling, incinerators – whatever they were discussing.
The Taoiseach has just answered the question.
There was a presentation on the general aspects of waste management and some of the initiatives in Departments. The meeting looked at policy areas. Some of the individual projects and schemes were also discussed. The Deputy knows there are quite a number of different schemes. There are different private sector schemes currently in the pipeline and at planning stages. We also looked at some of the EPA initiatives on this area, some staffing changes in the EPA and some proposals about who will deal with those and how they will be dealt with in future. It was a general discussion. There were some individual projects mentioned, but I was not involved in the detail of them.
I call on Deputy Kenny.
I would like the Minister of Education and Science Deputy Dempsey, to clear up the business of the Cork School of Music directly with Deputy Allen. It is of importance nationally in view of Cork being the European City of Culture in 2005.
Does the Deputy have a question?
In his capacity as chairman of the cross-departmental committee is the Taoiseach concerned at what is happening in the area of waste management, sewage disposal, and water treatment? We are now moving into an era where a small number of large companies will control all of these services within ten years. This will mean the consumer will be fleeced. Every household and business will have enormous charges placed against them. Are we not heading down a road where privatisation and selling off these services to international groups will become evident in this State? Will the Taoiseach also agree that the Government should not lose sight of the loss of local authority involvement in these essential facilities? Are these issues of concern to the Taoiseach and his cross-departmental team?
I do not claim to be an expert in this field, but what has emerged at the committee is that most of these companies are involved in the operation of contracts. These are major contracts with major companies and major investment. The overall contract in the Dublin water treatment scheme is €300 million. In the State under the national development plan, the amount of investment by these companies amounts to €4.4 billion.
I take the Deputy's point that one does not want to lose the local authority involvement in this area. However, the Dublin water treatment scheme that is just completed, is considered to be the best in the world. That now sets the standard for the rest of the State, not alone to go beyond EU standards but to go higher than those. The intention is to replicate that on a nationwide basis but not to the same extent, because the Dublin plant has a capacity to take 30,000 tonnes more and cope for 1.6 million people.
One will only get public private partnership involvement if the investment is of a substantial size. In the smaller schemes, there will be no interest from the large private sector companies. They tend to be conglomerates but the local authorities have a key role in these developments. In the case of the Dublin plant the local authority is the regulator. I am sure the same is true with other local authorities where private sector companies are the operators. That is probably the way forward in this area.
The design, build and operate system, which is being hived off completely to these companies, will remove the element of local authority involvement. Previously, it was a case of design, get departmental approval, seek tenders and have the local authority operate the project, but now it is design, build and operate for 20 years, in which case, the charges will escalate and county managers will have no option but to pass this cost on to consumers. The extension to water or sewerage schemes will be at the companies' discretion and the charges may be exceptionally high. This is a dangerous precedent. The cross-departmental team to which the Taoiseach referred should be cognisant of what can happen in five, ten or 15 years if this trend continues.
I accept that care will have to be taken. The local authority engineers are still involved in the projects and they still have to approve them. This approach was taken in order for us to get up to EU standards and to generate the necessary critical mass to get ahead. I think everyone agrees that such an approach was required. The Dublin water treatment scheme is world class. It is of a higher standard than the one in the USA, which was previously considered to be number one. I do not think the State would be capable of doing that to the same high standard or to get the big players involved.
Dermot Lacey is still alive anyway.
This approach allows big operators to come in and assist. Engineers have informed me that the costs of dealing with the entire process of waste water treatment on a stand-alone approach to design, build, finance and management are far less. The input is also reduced in terms of staff, which may not always be desirable, but because of the level of infrastructure, the engineers say that each year the running costs will be lower. Although it is a 20-year period that is involved, if the maintenance costs are built into it, it should mean that the processing is safely done even after the term is up. There is also a built-in bonus as the by-product of the wastewater process can be sold for agricultural use which seems to make commercial sense.
I have a question in response to what the Taoiseach said. Given our historically over-centralised development and the fact that we have the highest per capita car use of any EU member state, does he accept that the infrastructural element of the national development plan will have to be more carefully focused? Perhaps he should be the one driving the process because in view of what he said about line Ministers having responsibility to get on with their job, will he accept that whether it be line Ministers or line dancers there needs to be a choreographer who is focused on making sure everybody is responding to whatever tune is being played? At the moment—
The Deputy must ask a question.
—the tune is very energy intensive and unsustainable.
The Taoiseach made the comment that public private partnerships are being used for projects that are viable and have an economic return. If that is the case, taking into account the views of the Minister for Transport, Deputy Brennan, why could the pension reserve fund not be used if the projects were viable? If the projects are viable for PPP, why not use the pension reserve fund, as this will also result in a return for taxpayers? Surely that is an argument for using it?
The Deputy should confine himself to questions.
I am. Is that not an argument for using the pension reserve fund more so than is currently the case? If we are to go further down the PPP route, is there not a clear need for whistle-blowers legislation? The Public Interest Disclosure Act of July 1999 has been found to be most useful in the UK. Had it not existed, there would have been more devastation following from the privatisation of the railways. Is there not a clear need for this kind of legislation in respect of private operators acting in the public interest?
I remind the Taoiseach that there are two other Deputies offering as well.
We appear to be talking about different initiatives. The railway here is operated exclusively by CIE. Connex was awarded a contract in respect of Luas by the RPA and that is the only private operator in terms of rail. As regards sustainable development, the contract we mentioned, namely, the new waste water Dublin project, is the most sustainable contract in the world. There is nothing more sustainable than that.
What about transport?
The Deputy should allow the Taoiseach to reply.
What we must do in the transport area, and we have almost completed on the Dublin-Belfast route, is get direct roadways on the main five routes to cut down travelling times. Whether we have the lowest or the highest number of cars, we must get proper infrastructure on the Dublin-Belfast, Dublin-Cork, Dublin-Limerick and Dublin-Waterford routes. That is our priority and that is why we have spent record amounts of money. We are also providing enormous subsidies. The CIE figure this year is €0.5 billion, of which the lion's share will be spent on rail. The taxpayer is subsidising rail transport to the tune of hundreds of millions of pounds. No one is trying to buy our rail service or to get involved in public private partnerships. The challenge for the State is to make CIE as efficient and effective as it can and to continue to modernise it. We have introduced the rail safety programme and new carriages. It is not like the British system and I would not like it to be similar to it. I would like to get the best value, as the Minister is trying to do. We want to take the customer into account to the maximum extent possible. We want to ensure that the huge resources we have provided will give value back to the users of bus and rail in particular.
My question earlier focused not on waste water but on waste management, particularly in relation to incineration. Can the Taoiseach confirm to the House if the cross-departmental team or the Cabinet sub-committee has addressed the issue of public private partnership involvement in incineration plant construction? What is the current status of those deliberations?
The Taoiseach said in his earlier reply that he chairs the Cabinet sub-committee on the national development plan. How frequently has that committee met? Is there an official in his Department with explicit and total responsibility for co-ordinating that committee? Has that committee always taken the overview of the projects or was some transfer made in the past couple of years to the Department of Finance? What, if any, is the relationship between that committee and the co-ordinating and monitoring committee in the Department of Finance to which he referred?
As regards Deputy Ó Caoláin's question, there is no funding available for or given to private sector projects. However, the Minister for the Environment, Heritage and Local Government and the Environmental Protection Agency must ensure that they regulate any projects in this area. They have a deep interest in any such projects. The State does not give money to the public private partnerships the Deputy mentioned.
As regards Deputy Quinn's questions about the overview, the Department of the Taoiseach co-ordinates the work across Departments. There is a named official in my Department who acts as the co-ordinator. The meetings are always held once a month. There are sub-meetings held on different projects and the cross-departmental team of officials meets every month. There is at least a meeting at ministerial level with officials and a meeting of officials. The Department of Finance is represented on that committee. It co-ordinates all aspects relating to the contracts signed, the expenditure approved, overruns and any other initiatives. The individual in my Department co-ordinates all the other Departments.
That concludes Taoiseach's questions. We now move on to questions to the Tánaiste and Minister for Enterprise, Trade and Employment.