Vol. 621 No. 2
54 Ms O. Mitchell asked the Minister for Transport if it is the Government’s long-term intention to retain a minimum share of at least 25.1% in the State airline Aer Lingus; if so, the means by which it is intended to do so; and if he will make a statement on the matter. [21900/06]
The Government's intention is to retain a significant shareholding in Aer Lingus so that key strategic interests can be protected. In this regard, the State will retain a minimum shareholding of at least 25.1% in the company, although the exact figure still has to be decided. This is significant because a minimum shareholding of 25.1% in a public company ensures the holder of that interest significant influence over matters requiring shareholder approval. It provides a basis on which to establish board representation. Ownership of more than 20% of the issued share capital of a company would, as the House knows, prevent a third party from compulsorily acquiring 100% of the company.
The question of the level of the shareholding to be retained by the State in the longer term will be a matter for future governments. However, this Government has a clear commitment to retaining at least 25.1% of the company's share capital.
I thank the Minister for his reply. He stated that he wishes to retain a significant shareholding, so that this would give the State a significant interest and prevent the future takeover of the company, against the Government's will, by a third party. Is the Government making a long-term commitment to a minimum share ownership in Aer Lingus? If so, how does it propose to proceed in that regard?
I take it that the reason the Minister did not answer the second part of my initial question is that the answer to the first part is no and that it is a matter with which future Governments will be obliged to deal. Does the Government intend to make a long-term commitment to Aer Lingus?
All shareholders — that includes all of us — and stakeholders, particularly those who work in Aer Lingus and who have a very immediate interest, are entitled to know precisely what the Minister is proposing. He referred to a minimum holding of 25.1% initially. If there was a long-term commitment, he would at this stage be able to inform the House how he intends to effect it. When further shares are issued and an automatic dilution of the State's shareholding occurs, does the Minister intend to hold, in the first instance, more than 25.1% or is it his intention to buy more shares in the company in each further flotation? A long-term decision must have been made in respect of selling the company or is it the Minister's intention to do what was recommended in the Goldman Sachs report, namely, that this should form part of a long-term exit strategy? If that is the case, what is the point in referring to protecting strategic interests?
My reply to the Deputy was clear. I described a significant shareholding as a minimum of 25.1%. The exact figure has not been decided, so it will be a minimum of 25.1%. It may well be more than that but I am obviously waiting for the final analysis from the advisers with regard to that position. That is of some significance. I have had discussions with the company, trade unions etc., in respect of that point, so I am in a slightly difficult position. I cannot speculate on the floor of the House for obvious reasons. However, I am being absolutely clear in saying that it will be at least 25.1%. It may well be more than that.
On the second part of the Deputy's question, I am being unequivocal in so far as this Government is concerned. I cannot speak for future Governments, but the current Administration has decided to retain 25.1% of the company as an absolute minimum.
The Minister is simply not answering the question. My question does not relate to how much he intends to retain. The minimum figure has been placed in the public domain. My question relates to how long the State intends to retain a strategic interest in Aer Lingus. What is the Government's long-term strategy in respect of the ownership of the airline? Is it the Government's intention to put forward a strategy that will allow it to retain a minimum of 25.1%? Or is it intended that this will merely form part of an exit strategy?
It certainly is not part of an exit strategy. Obviously, the Deputy is anticipating that we may be in power after the next election. In that event, the position will not change and we will retain 25.1% of the company. That shareholding could be more, in the initial stages, and this would provide us with some headroom.
In the event of a further flotation of the company within the lifetime of the Government, is it the Minister's intention to buy sufficient shares to maintain a 25.1% stake in the company?
The Deputy can be absolutely certain there will not be another flotation of the company during the lifetime of the Government. I know where she is going with her questioning. I can only speak on behalf of this Government. The position is that we will retain a minimum shareholding of 25.1% in the company. That is absolute.
Am I correct is saying there is no clear long-term strategy on this matter?
There is. The Deputy is trying to put words in my mouth.
I wish somebody would.
The intention is clear. The Deputy knows how proscribed I am at this stage.
The Minister is not in the slightest. He should not talk to me about commercial sensitivity.
I wonder why the legal people keep telling me about this.
This has nothing to do with commercial sensitivity except that this lack of clarity has implications for the sale of the airline.
There is no lack of clarity. I do not want to be argumentative about this — I cannot nor do I want to put myself in that position. The position is absolutely clear. The Government has decided to retain a minimum stake of 25.1% in Aer Lingus and it may well be higher than that. I am waiting for the final——
My question is how the Minister intends to retain that stake.
We will retain a 25.1% minimum shareholding in Aer Lingus. The shareholding may well be considerably higher than that. That remains to be seen. There will, however, certainly not be another flotation of the company in the lifetime of this Government.
55 Ms Shortall asked the Minister for Transport the way in which he will reduce the waiting times for driving tests; and if he will make a statement on the matter. [21883/06]
As I have consistently indicated, the delay in providing driving tests is a matter of regret to me. It not only represents a poor service to the public but it also hampers the development of initiatives which I wish to pursue and which will contribute further to road safety. The driving test and those who deliver it are a key element in the road safety strategy.
It is my objective to eliminate the backlog of driving tests by mid-2007. That means having a waiting list of no more than 50,000 that can be scheduled in a ten to 12 week period.
The measures in place to deal with this are as follows. Seven civil servants from the Department of Agriculture and Food commenced working as driver testers in April this year and will conduct tests in 2006 and 2007. This gives an annual additional capacity of about 10,000 tests. Six further driver testers on two-year contracts are due to commence training on 12 June, with another five being trained shortly thereafter. These will provide additional capacity of about 15,000 in a full year.
A bonus scheme for driver testers has been operating since February 2006. The testers have the potential to deliver up to 40,000 driving tests over the course of the year in the evenings and on Saturdays.
The final element in the package to eliminate the backlog of driving tests was to outsource a block of tests to an outside agency. Negotiations on this aspect reached a position last week where Mr. Kieran Mulvey, chief executive of the Labour Relations Commission, acting as an agreed mediator, recommended proposals which would enable my objective of using this option to be implemented. I have accepted the proposals and I understand these are to be considered by union members this week and I sincerely hope they will accept them. I thank Mr. Mulvey and those involved on both sides for bringing this matter to a conclusion.
The proposals envisage that a contract would be in place by 1 July of this year. This would be a contract solely for the purpose of achieving a defined number of completed tests to assist in eliminating the current backlog of applications. It could be extended to 45,000 tests if necessary. I expect to see a marked reduction in the waiting list by the end of this year and will formally review the position, taking account of all the above measures, at that stage.
The figures the Minister gave are interesting. Has he factored in the signal he gave on what is likely to happen in the case of provisional drivers and the intention to end the unaccompanied rule? We would all welcome that move. We are probably the only country in Europe that allows learner drivers to drive unaccompanied. The new Bill provides for changes to that position. Has the Minister factored in the rush that would be caused in the number of provisional drivers applying to do their driving test, if he were to proceed to introduce those changes? If he were to do that, it would cause quite a rush which would result in a significant additional number to be factored into the current overall numbers. There is an underlying demand for approximately 177,000 tests per year without taking account of the backlog. By my reckoning, by the end of 2007 the waiting time for the driving test will be only reduced to 26 to 28 weeks. Where exactly does the Minister intend going with these proposed changes?
Does he accept that, to some extent, too much emphasis has been placed on the numbers without examining the system and the way it operates? Is he aware that last year 23,000 tests were cancelled and that there is something seriously wrong with a system whereby a person driving on a provisional licence never needs to take a test? Recent figures show that 2,000 people over the age of 70 years are driving on provisional licences. Does the Minister intend to change the system to oblige people to take a test before renewing their provisional licences?
I and the House in general are ad idem with almost everything the Deputy has said. The Deputy is right in identifying the system as being out of date and incapable of handling the demands of modern living as much as the modern requirements for good testing. Many tests are lost each year due to people not turning up. When we go through the system it will be interesting to find the real bubble. We expect it to be smaller than the figures show for a range of reasons.
If someone does not show up for a test we need to be able to contact someone who is known to be available at short notice to come to do the test. This fast system is available in many other countries. I agree that people should not be allowed on the roads without doing a test. This is one of the issues with which we will deal when we do a root and branch redesign of the driving test system. It has been pointed out recently that the test costs less than one driving lesson, therefore people do not value it. People apply and pay the €33 charge but feel it does not matter if they do not show up.
There are a myriad of issues to address. We have thought long and hard about the changes. I sincerely hope the unions will recommend that their members agree to the outsourcing deal brokered by the Labour Relations Commission. I have asked the Road Safety Authority to put the deal into action immediately because the tendering process is complete and is ready to go. I will conduct a review at the end of that process on which I will report back to the Deputy.
The time for this question is concluded. The Minister should move on to Question No. 56.
Are we not to have a second round of supplementary questions?
No, there is a time limit.
It is standard practice for Priority Questions.
Six minutes are allowed. That is the rule of the House, which I must observe.
Yes, but there is a limit on contributions too which should be enforced.
I was not trying to stall. I thought the Deputy was going to speak again. I will proceed more quickly. I am sorry about that misunderstanding.
56 Mr. Eamon Ryan asked the Minister for Transport when he intends to establish the proposed new Dublin transport authority; the powers the authority will have to direct other local authorities and transport bodies; and the changes that will be required to the regulation of other agencies as a result of the introduction of the new authority. [21898/06]
57 Ms O. Mitchell asked the Minister for Transport if he is satisfied with the progress made to date in establishing the Dublin transport authority since its announcement in 2005; the work carried out by the informal authority to date; when the enabling legislation will be published to allow for its formal establishment; and if he will make a statement on the matter. [21901/06]
I propose to take Questions Nos. 56 and 57 together.
In November 2005 I appointed a Dublin transport authority establishment team to make recommendations on the establishment of a transport authority for the greater Dublin area, addressing the remit of the authority, its powers, structure, organisation and human and other resource requirements and such other matters as the team considered appropriate; advise on the content of legislation required to establish the proposed authority on a statutory basis; and make recommendations on the interim arrangements that should be put in place pending the enactment of the legislation.
I received the report of the Dublin transport authority establishment team on 28 March last. Significant progress has been made since then. My officials circulated to relevant Departments on 27 April a draft memorandum for Government and the draft general scheme of a Bill to establish the new authority on a statutory basis. Several meetings have subsequently taken place between my officials and officials of the Departments of Finance and the Environment, Heritage and Local Government to clarify certain issues.
I will shortly submit the matter to Government for decision and I expect to be in a position to publish legislation as soon as is practicable following such decision. It would not be appropriate to outline details of my proposals for the new authority pending consideration of the matter by the Government. The Government will also consider the establishment of an interim authority to put in place the organisational structure of the new authority, such as the recruitment of senior management, pending the passage of legislation.
Given that there is a Railway Procurement Agency for railway infrastructure and a planning body in the Dublin Transportation Office telling us what sort of public transport we need and where the rail lines should be, does the Minister agree the principal role of this new authority will be regulatory? This is crucial and if it is to work it must have real power over other agencies. We must have an agency that tells Dublin Bus, CIE, the RPA, the DTO and local authorities what to do. Will the Minister give the authority absolute powers over such agencies to direct them in their work?
How does the Minister propose to set up a regulatory agency that will tell transport companies what public transport services we should have — in terms of timetables, routes etc. — if he has not solved the issue of what to do with the bus service in Dublin? How can we have a regulatory agency if the authority cannot state at the outset to Dublin Bus and whatever companies work in the area that it is the new regulatory regime, that it will put a franchise in place, set up a bidding system and explain how it will work? Surely a regulatory agency without such authority will not have a real role. Will the authority have those powers and how long will it take to set it up?
The Deputy is right in principle. The Dublin transport authority must have substantial legal powers to be able to pull together all the elements, whether fixed rail, light rail, commuter or bus traffic etc., to develop a general public transport network in Dublin and regulate the entire market. There are good examples from other capital cities as to how a regulatory authority works and it is feasible to do the same in Dublin, particularly in the greater Dublin area.
The Deputy raised issues I am dealing with in parallel but which impinge on the legislation for the Dublin transport authority and the reform of the market. There is an interrelationship between the two issues. I have kept the stakeholders on every side fully involved and have asked them to work through the issues with me. I appreciate the efforts they are making. We are at a crunch time. I have circulated the DTA memorandum for Government to the other Departments and hope to bring my proposals to Government shortly.
The legislation will take account of a number of the issues the Deputy has raised. Dublin Bus, Bus Éireann, Iarnród Éireann and private sector companies are all operating companies. There is a difference between how they operate and how we manage and regulate the market. The DTA will play a key role in that area. Currently the local authorities, the DTO and many other bodies have an input, but we need to centre authority in one body to have a clear vision of how we should go forward in terms of the best outcome for the paying customer, the public.
The Minister says we are at a crunch time with regard to, for example, dealing with Dublin Bus and setting out the franchising system for buses. We have been at that crunch time for the past three years, but when push came to shove, the Taoiseach shoved the previous Minister out of office because he did not want to make a decision on it. Given that the Government has been sitting on the issue for the past three years, how can we expect the Minister to get Cabinet approval for radical changes in the transport system?
Anybody who looks at my record since I came into the Department of Transport will see that decisions have been taken on many of the issues that were around for many years. As far as I am concerned, the Deputy may take it for certain that the decisions on the Dublin bus market will be taken also.
I am looking at the Taoiseach's record. He will not go near the issue.
The Taoiseach has been fully supportive of everything I have pursued in this regard.
The Dublin transport authority has been promised for almost ten years in some form. Therefore, the Minister's record is not so tremendous. When the Minister announced Transport 21, it was only the next day he remembered the need for some sort of body to pull it all together.
It was not.
Two days later.
The Minister gave the chairperson an extraordinary brief — to go away and find out what her job was and to come back then and tell him. This does not inspire confidence that the setting up of the body has been given great thought. When will we get the legislation that will give this body teeth? Transport 21 is just drifting along in the meantime. All the individual projects are either progressing or not progressing, depending on the various agencies involved. There is downright inter-agency rivalry where there should be co-operation, co-ordination and integration. It is totally destructive and contrary to the public interest that some agencies are denigrating the work of other agencies. It is up to the Minister to get someone to knock some heads together to ensure that all the bodies act in the public interest. I could give a dozen examples of circumstances in which that is simply not happening at present. No progress has been made on integrated ticketing, for example. There is an ongoing row between Dublin Bus and Luas about the use of O'Connell Bridge. Why has the second bridge, which has been promised in Dublin for ten years, not been finished? I refer to the Macken Street bridge, for which the Department of Transport and Dublin City Council are responsible. No co-ordination is taking place in respect of many such projects, all of which will perish on the same rock of indecision because the agencies cannot decide which of them is right. The proposed new Dublin transport authority must be established and allowed to make decisions in the public interest. When will the legislation be brought before the House?
I disagree with much of what the Deputy has said. I am pleased that we are ahead of schedule, according to the timeframe I set out under Transport 21, particularly in Dublin but also in the rest of the country. The four Luas——
Is it the——
Sorry, it is up to me to answer the questions asked by the Deputy.
Is integrated ticketing ahead of schedule?
I specifically asked about the reality.
I agree with the Deputy. I have pronounced——
What about those who have to sit in traffic for hours? Is the Minister telling the people who have to sit in traffic for hours every day that they are satisfied?
I suppose the Deputy has a magic wand to sort that out. The reality is that any fair assessment of Transport 21, including the assessment of the Deputy's colleagues on all sides of the House who tend to want to meet me every time we are out, which is about twice a week, opening or starting new projects——
Or re-announcing them.
——highlights the fact that it is going extremely well. As Deputies have rightly stated, a body like the proposed Dublin transport authority is needed to oversee transport matters in Dublin. Of course there is rivalry between the different agencies which are responsible for their own modes of transport — there is no doubt about that. The integrated ticketing project has not been as much of a success, for all sorts of reasons, as people on both sides of the argument would have wanted. That is a true statement. I have probably devoted more time to trying to sort out that issue than to anything else since I started to work in the Department of Transport. I hope we are about to reach a conclusion in that regard.
The functions of the proposed Dublin transport authority are not preventing the quick delivery of many projects, including the new railway station in the docklands area of Dublin, four Luas projects, metro north and all the different roads projects which are being started and opened on a weekly basis. Approximately two new roads are being opened each week throughout the country, including Dublin. There has not been any slow-down. I agree with Deputy Mitchell that the long-term view is that an independent regulatory body is needed to deal with a range of issues relating to the greater Dublin area. The proposed Dublin transport authority is that body.
Should I understand from the Minister's answer that the establishment of the proposed Dublin transport authority is a long-term project? Is it the case that the period of time covered by Transport 21 will have elapsed, in effect, by the time the authority is established? Can the Minister tell the House when the relevant legislation will be before it? Is it a long-term prospect?
As the sun is shining, I will take a deep breath and——
The Minister said that it is a long-term project.
I said ten minutes ago that I have received the report. I have already circulated a memorandum for Government, with the heads of the Bill. There is a procedural timeframe in that regard. It is due back to me shortly. I expect to take it to the Cabinet in the next few weeks. That is what I have said.
When will we have the legislation?
Will we have it this year?
I said that the legislation will be drafted as quickly as possible and that I expect to publish it in the autumn. In the meantime, I will establish the body in shadow form, as I did in the case of the Railway Safety Authority, which had a huge impact long before any legislation was in place.
58 Mr. Crowe asked the Minister for Transport the reason he has insisted on the privatisation of Aer Lingus without adequate and satisfactory consultation with the unions and without agreement from the majority of the national airline’s employees; and if, in view of such opposition, he will reverse his decision. [21882/06]
I do not accept that I have not consulted satisfactorily with Aer Lingus staff or trade unions on the planned investment transaction for Aer Lingus. Prior to the Government's decision in May of last year to reduce its shareholding in Aer Lingus to facilitate equity investment in the company while retaining a significant stake, I consulted the trade unions on the company's future ownership structure and funding requirements, as required under the terms of Sustaining Progress. Since then and prior to the decision in April this year on the basis on which an investment transaction will take place, I met a delegation of Aer Lingus trade unions and officials from the Irish Congress of Trade Unions on three separate occasions, in June 2005 and on 2 March and 3 April this year.
In addition, the agreement reached with the Aer Lingus trade unions concerning the employee share ownership plan, ESOP, provides for a consultation process with regard to any third party investment in Aer Lingus. Pursuant to that agreement, departmental officials, the advisers to the Minister for Finance and I have met on a number of occasions the advisers to the Aer Lingus employee share ownership trust, ESOT, and the Aer Lingus central representative council. The latter is the representative body of all the Aer Lingus trade unions.
I expect the Minister is aware that many of the union representatives are dissatisfied with the so-called consultation. Does the Minister understand consultation to consist essentially of him informing the workers' representatives about what he intends to do or is there a genuine consultative process involved?
As regards the meetings, the Minister's strategic plan states that he will sell off Aer Lingus in the long term. Does he accept that now is probably the worst time ever to so do, particularly in view of increasing oil prices and the prospect of falling passenger numbers and profits? For example, one may consider the difficultiesencountered by Air Berlin, which recently floated on the stock exchange. Employees' shares were diluted and the expected money was not realised from the flotation.
The workers are in the dark at present. When will the Minister inform them as to what will happen to the company? There has been much stalling on this matter since 1992. What timescale does the Minister envisage in respect of the sale and is commercial investment completely off the agenda? Although Ireland is a hub at present, is the Minister concerned that it will cease to be so after the possible sale of Aer Lingus and will become more of a backwater? I will be interested to discover his view in that regard.
As regards the consultations, those to whom I have spoken are dissatisfied with the Minister's involvement therein. While I am aware that he will meet the unions again tomorrow, people expect consultations to be a two-way process. Until now, the Minister has not taken on board the concerns of the workers, particularly with regard to their pensions and so on.
Since the start of this process, I have been direct, open and straightforward with all the unions. They know and appreciate that. I have also behaved similarly towards management and have no difficulty with meetings or consultations. While I have been clear on the issues, some of which were raised by the Deputy, I will not comment on them now. They are part of the process and I wish to see conclusions drawn on them.
I accept that, from an ideological perspective, some people are opposed to the sale. While that is fair and while I respect their position, it does nothing to develop the company into the future. Although the Deputy mentioned another airline, despite the efforts of some to suggest otherwise, there is no comparison between it and Aer Lingus. The other airline has been a loss-making company for the past five years and it operated in a different type of market to Aer Lingus.
Aer Lingus is profitable. For a company to go to the market, it must be profitable. It is, therefore, the right time to do so. The business plan presented by Aer Lingus is significantly geared towards the future. I negotiated the open skies deal from an Irish perspective with regard to a transition period for Shannon. I travelled to the United States and met the Secretary of Transportation, Norman Mineta, and have had close relationships with the EU Commissioner for Transport, Jacques Barrot. I have engaged in considerable dealings with the various EU presidencies regarding this issue. This is the right time for growth in airports, airlines and passenger numbers. I do not accept the Deputy's view that passenger numbers will decrease.
While the question of fuel is undoubtedly an issue for all airlines, Aer Lingus has coped well in this regard. All international long-haul airlines, including Aer Lingus, have a fuel surcharge and it has not affected passenger numbers. Those airlines which state that they do not levy a surcharge are short-haul operations. I understand that no short-haul operations have added surcharges on short-haul routes.
When everything is considered, it is evident this is a good period. I appreciate the work being undertaken by the unions with the management in the company. I also appreciate the work of all those who advised the unions, the Minister for Finance, his Department and me. It has been a good process, which has been very communicative. However, it must come to a conclusion. We are ready to go to the market and we must do so. It is the correct thing to do to provide Aer Lingus with a major future. Failure to do so would cripple the airline and tie its arms behind its back, making it impossible for it to compete on a level playing field. Neither I nor the Government will preside over such a scenario.
