Dáil Éireann debate -
Tuesday, 24 Oct 2006

Vol. 626 No. 1

Leaders’ Questions.

Mr. Kenny

I notice the former Tánaiste is as far away from the current Tánaiste as she can get. There is no need for comment.

I wish to ask the Taoiseach about the recent announcement by the Government and the Minister for Transport of what is the biggest infrastructural project in the history of the State, the metro north to Swords which will go from St. Stephen's Green to Dublin Airport in 17 minutes with 15 stops.

The credibility of the Minister, Deputy Cullen, with regard to delivery, has been seriously damaged by his incapacity or his inability to give even an overall figure of what the cost will be. As the Tánaiste will be aware, for this project to succeed will require a national buy-in, absolute certainty as to the cost and the business case for investment and the consequent benefits to the customer and the consumer. This transparency is completely missing in this case.

The ESRI report issued today clearly states that major rail projects must be the subject of a full cost-benefit analysis and this makes sense. There is broad public support for the project. Anything that will tend to alleviate the frustration of hundreds of thousands of motorists, consumers and citizens in this city, is welcome. However, doubts are being expressed about this project. The number of occasions on which it has been announced previously and the failure of the Government to deliver on time and on budget on so many major projects in this city, leaves the credibility of the Minister for Transport in tatters.

I wish to ask the Taoiseach a straight question. What is his estimate of the cost of this project? Is it €1 billion, between €1 billion and €5 billion or as much as €15 billion, according to some estimates? What is the overall figure? Given that the taxpayer will be paying for this until 2040, is the Taoiseach prepared to state that the issues determining credibility of a project such as this, in terms of the case for investment being made and evaluation before the project is given the green light, will all be published so that the public at large will know exactly what is involved in the project? The Taoiseach has €3 billion of taxpayers' money in respect of which the Government has been unable to budget in the past. It must be transparent and be published so everybody understands what is involved.

The Taoiseach

I totally reject what Deputy Kenny said about the performance of the Minister for Transport. Under the Minister's watch we are seeing one of the best ever roll-outs of infrastructure. We are seeing this on all the main roads — the road to Belfast which is done, and the roads to Cork, Limerick and Waterford. Some €1.5 billion is being spent on roads infrastructure. On the rail programme, the main rail lines to Cork, Galway and Waterford have all been successfully enhanced.

A Deputy

I was delayed for a full hour.

The Taoiseach

In 18 of the last 19 contracts, the procurement and the contract system are coming in on time and on budget. Therefore, the first part of Deputy Kenny's assertion does not hold up and I should not bother to comment on it.

On the second issue, the cost assessment analysis has been done on the metro. There will be a further cost assessment analysis when we go to the market on the basis of PPPs and all the advices. We will not publish figures before going to the market. We have done the assessment. The RPA has completed a comprehensive consultation process and worked with its own and international teams, including a team from the UK which is familiar with this work and has been involved in some of the biggest contracts in Europe.

The metro north will be procured as a public private partnership, funded through annual availability payments over a period of 30 years which is what would be done with a large project like this anywhere in the world. The first availability payment is not due until the metro opens for passenger services. The capital costs included in the metro business case and the value of the annual availability payments remain commercially sensitive in advance of a public procurement. What dumbwit would go out to the market and state the benchmark at which one should quote? For God's sake let us have some sanity. One does not use one's assessment and go out to the market and suggest one should come in between A and B. What we would hope on this contract is to get some of the biggest contractors and PPP operations in the world to take an interest in this project at a competitive tender price. That is the way we should do it. Yes, we have our assessment but we will go to the market and have a second analysis. As in the case of any contract, the assessments will be transparent.

Mr. Durkan

The same as e-voting.

The Taoiseach

One does not take a major infrastructural project and spell it out before testing the market and the interest from various parts of the world. That would be a nonsense. While the RPA has done careful assessments and will continue to do so I agree it is a huge project. I heard the same arguments a few years ago here about Luas, that we would never build it, the project would hit a brick wall, nobody would use it, it would always be late, cars would crash into it——

Mr. Durkan

They did.

The Taoiseach

Now more than 23 or 24 million people use it. This project is being carefully thought out, carefully planned and will be carefully operated through the system. I assure Deputy Kenny that the assessment will be transparent because it involves a huge amount of public money.

Mr. Durkan

That is something.

The Taoiseach

As he rightly said the project is required and will carry in the order of 20 million or 30 million people. We have to put it out to tender in a careful way and that is the way we will proceed.

Mr. Kenny

Of course, the Taoiseach did not answer the question. He is asking us to take a leap of faith for Martin e-voting Cullen.

Mr. Cullen

I thought the Deputy would be more original than that. That is Deputy Rabbitte's line.

Mr. Kenny

I ask the Minister to hold on.

Mr. Cullen

Is it dumb and dumber? Can the Deputy not say something original?

An Ceann Comhairle

The Minister should allow Deputy Kenny to speak without interruption.

Mr. Kenny

The Taoiseach has gone out of his way to defend the Minister's record. The problem is that during the past ten years none of those over there on the front row has had to shuffle through the queues at Dublin Airport or the traffic jams which the rest of us have to endure. Nor has any of them had to put up with the traffic lights being erected at the exit to the port tunnel. One can imagine the traffic jams when they become operational. With respect, for the past ten years, none of those on the front row, who have been cosseted by their civil servants and get VIP treatment on their way out of the country, has to accept what ordinary citizens put up with on a regular basis.

Mr. Rabbitte

We are going to move the port.

Mr. Kenny

The Taoiseach said with the benefit of rose-tinted glasses that the Minister for Transport, Deputy Cullen, had had the project costed and evaluated. We have had all of this before on various projects including, in the Taoiseach's case, Campus and Stadium Ireland, where all the assessments, analyses and all the figures were supposed to be done on time and on budget and we saw the result of that. The Luas lines do not join up. The port tunnel is not yet opened, is five years behind time and has cost €700 million.

Mr. Cullen

It would not have been built by the party of which the Deputy is a member. The Deputy was against it.

An Ceann Comhairle

Allow Deputy Kenny to speak without interruption, please.

Mr. Kenny

The Taoiseach is asking us to believe 30 weeks before a general election that big bores will be under St. Stephen's Green on the way out to Swords. He knows in his heart and soul that is not possible——

Mr. Cullen

The Deputy is looking for a few votes.

An Ceann Comhairle

The Chair will have to take appropriate action if the Minister for Transport does not allow Deputy Kenny to proceed uninterrupted.

Mr. Kenny

The Taoiseach said it would be very dumb indeed to go to the market place seeking a ballpark figure. I remind him that the second phase of the M50 upgrade is a PPP project and the Government and the Minister for Transport have already announced it will come in at between €600 million and €700 million. That is an example of a major PPP project where the Government has given its ballpark figure, yet we are now asked to commit the entire nation to the biggest infrastructural project in the history of the country which the vast majority of the people will agree with intuitively but the Taoiseach will not tell the House the figure the RPA has arrived at, even in global terms. I shall ask the Taoiseach again. Does he agree that the M50 upgrade is a PPP project? Does he agree that the Government has already published a figure in respect of that? Will he commit himself to telling the nation the assessed figure? Is it €1 billion, €5 billion or €15 billion because we will be paying for this until 2040? If that man's record over there is anything to go by, this too will go down in flames.

The Taoiseach

Without getting into an argument the difference with the M50 is that the work has already commenced. It is in three phases and the work is under way.

Ms O. Mitchell

The PPP has not come in yet.

The Taoiseach

Obviously when a contract is under way in the first phase, one knows the price. The second and third phases have been priced also. Based on the assessment, the feasibility study and the cost analysis done by the RPA we will go to the market before Christmas. Then we hope to see, although we can never be certain, interest from serious international operations. Not many companies in the world would be able to get involved in a project of this scale. There are probably only six to ten companies. That will give us the ballpark figures against which we will do a further cost analysis. For strategic reasons, we will not provide that figure. The RPA will carry out a second analysis at that stage against the tenders. It is not a project that will happen overnight. It is fair to say the cost assessment analysis, the tendering projects and the timescale, including on the Luas, have improved dramatically. Eighteen of the last 19 contracts came in on time.

To go to the market and state where we believe the market will be and not to allow the companies to compete against each other would not be wise. Nobody in the business has advised us to do anything other than what we are doing. I do not think we will have to wait many months to see what happens. There is no doubt it will be a very large contract and will take several years to complete but we do need it. That is clear from the figures at Dublin Airport this year where there were 21 million passengers. Only a few years ago we were told that by 2010 there would be 15 million passengers but in 2006 Dublin Airport already has 21 million passengers. We are now told that within a decade 35 million passengers will pass through the airport. A project such as this is required, as is the development of Dublin Airport. The plans of Dublin Airport Authority and the work on the M50 are all major construction projects that must be done as cost effectively as possible. They will be done over a 30 year period on a pay-back system from the State. That is the wise way to do this work. The Minister will keep the House informed but to set it out now is not the way to proceed.

Mr. Rabbitte

In the report published today by the ESRI, there was a focus on a number of different areas of waste. One that was not mentioned, however, was the indemnity deal that we traced in this House on quite a few occasions in the past. The Taoiseach will recall this was a secret deal that gave indemnity to an entire array of contingent liabilities without ceiling. He will also recall that the State was bound to pay for the outcome. Notwithstanding the recommendation from the Department of Finance that it would be on the basis of a 50-50 break between the religious congregations and the State, the Government went ahead and ratified the deal in a most unusual fashion.

On several occasions in this House when I quoted figures advanced by the Comptroller and Auditor General, the Taoiseach used one of his favourite phrases saying that I was off the wall. In September 2003, I questioned whether figures from the Comptroller and Auditor General, ranging from €869 million to €1.04 billion, were correct. In reply, the Taoiseach said: "Our view continues to be that it will not be anything like what the eminent Comptroller has said." The Taoiseach repeated that line several times in the House. The 2005 report of the Comptroller and Auditor General was published recently and showed that the cost of the indemnity deal is now estimated to be €1.327 billion. How can the Taoiseach possibly justify the secret deal that was done without a memorandum to Cabinet, based on a verbal presentation by a Minister who was to leave office the following day, excluding the usual professional advice from the Attorney General's office, and without sight of the agreement? A deal was entered into that capped the contribution of the religious congregations at £100 million or €127 million.

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

If one subtracts that figure from the €1,327 million it means the Taoiseach is out by €1,200 million, or if he accepted the Department of Finance's 50-50 split, which would roughly have given €660 million to the State and €660 to the religious congregations, the Taoiseach is out by €534 million. That is the kind of waste that occurred. Does the Taoiseach admit he was wrong?

Mr. J. O’Keeffe

No.

Mr. Rabbitte

Does he admit the deal was a disaster for the taxpayer? Has he learned any lessons from it other than the lesson we will apparently now have to live with, which is that the Minister, Deputy Cullen, will not tell us the cost of projects anymore?

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

He cannot be wrong on that. If he does not tell us, we cannot know. The Taoiseach defended the Minister, Deputy Cullen, as being wise in not telling us, while the Tánaiste and Minister for Justice, Equality and Law Reform applied the opposite methodology when he bought a prison site. He let it be known who the purchaser was and we ended up paying €30 million for a site that was valued at about €6 million. Is there any limit to the waste in which the Government is engaged? What does the Taoiseach now say on the figures chalked up under the indemnity deal for which taxpayers will continue to pay in future?

The Taoiseach

The Deputy began by mentioning the ESRI report and I would have been glad to debate it but he did not ask a question on it so I will leave it aside.

Mr. Rabbitte

Good.

The Taoiseach

We thank the ESRI for its contribution to the debate. The Government will continue to do the right things to help the economy.

Mr. Howlin

Will the Taoiseach not comment on that?

Mr. Rabbitte

He should not read the rest of the page.

The Taoiseach

We will not tax more, spend more or put up school fees. Some 14,000 applications have been made to the Residential Institutions Redress Board. Earlier estimates of the final cost by the Department of Education and Science, and of the board itself, were lower than this. The Department's estimate prior to the establishment of the board was €610 million, including legal and administrative costs. It must be accepted that nobody could have predicted with certainty how many applications there would be. It was not known how many people were in our institutions that were under State control and it was not known how many of those would put forward a case of abuse of one kind or another. I think we are getting closer to knowing what that is. The final cost of the scheme will not be known until the board has completed its work. The estimate that the final cost could be up to €1.3 billion was based on the number of applications received by the Department at the 2005 deadline, a cumulative average award of €76,000, and legal and administrative costs of approximately 20%.

In outlining this estimate last January, the Comptroller and Auditor General also referred to the possibility of the average award decreasing as more applications are processed. Allowing for this, he put the final cost of the scheme at between €1 billion and €1.3 billion. He added that any estimate of the ultimate liability arising from the redress scheme is based on assumptions which are impossible to validate and should therefore be treated with caution. Recent trends in awards made by the board would suggest that the average award is indeed falling, as the Comptroller and Auditor General said, but there is no guarantee that that trend will continue.

The fact has been accepted by the Comptroller and Auditor General's report that none of us could have known what the figures would be. Indeed, the redress board has emphasised that. The board's original estimate, in its 2003 report, was between 6,500 and 7,000 applicants and it estimated between 7,500 and 8,000 applicants in its 2004 report. The figures were tentative and there were no precedents for the scheme. Either way, those are the statistics. I know Deputy Rabbitte's view on this matter and he knows mine. As far as the deal is concerned, we had an obligation to set up a scheme to deal with people who were abused, in one form or another, in State institutions run by religious. Seven years ago, I apologised on behalf of the State and I said we would set up a scheme.

Mr. Rabbitte

The taxpayers will pay for it.

The Taoiseach

Yes, the taxpayers will pay for it, as they did for Army deafness and other issues. Let us be honest about the point at which Deputy Rabbitte and I differ on this matter. He believes I should have taken the money from the church but I do not. I do not believe the church should have coughed up another €500 million. I accept Deputy Rabbitte's view and he should accept mine. The Irish church does not have those resources. I was not prepared to go down that road, nor am I prepared to do so now. Some 14,000 people who were abused in institutions have applied to the Residential Institutions Redress Board. We all thought there were 5,000 such people at one stage but then the figure rose to 7,500, then 8,000 and later 9,000. If the figure is 14,000, so be it.

What happened in those days is sad. The Deputy may argue that they should not be paid or that we should take land off the churches, but that is not a road I would go down.

Ms Lynch

Fifty-fifty.

The Taoiseach

I make no apology to this House or to anyone else about the way we did it. We made an apology and said that we would give substantial payments to these individuals, many of whose lives were wrecked. In addition, many of their family lives were non-existent because of what had occurred. The position is that we are paying them and I stand over the decision. I do not believe for a second that we should have taken any more money from the religious institutions in the State. That is my position.

Mr. Rabbitte

There is no point in the Taoiseach looking across at me with his "Brian Dobson" eyes and saying "Sure, nobody could have known". If nobody could have known, why did he cap the amount at £100 million? He is dealing with taxpayers' money. There is no point in taking out the handkerchief again and talking about how — it is true — so many thousands of lives were disgracefully ruined. It is true that everybody in this House believes that they ought to be compensated, but that is not the issue. The issue is that the Taoiseach was in charge of taxpayers' money and he set up an arrangement whereby a man who was leaving office the next day did not comply with required Cabinet procedures, did not submit a memorandum, excluded the Attorney General's office from the advices that were given in advance and did not make the agreement available to Ministers. The Taoiseach entered into a secret deal. As the number of applicants climbs by thousands, the Taoiseach now says "Sure, how could I have known?" How can the Taoiseach know the length of the port tunnel to Dublin Airport? At that rate of going he would probably end up at the prison site in Thornton Hall.

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

The Department of Education and Science's original assessment was €250 million, not €651 million, yet the Taoiseach has ended up paying €1,200 million of taxpayers' money. Many people would translate that into so many classroom places or special needs assistants. Why, if the Department of Finance said 50:50 was a fair division, was it forced from that in a secret arrangement while the then Attorney General was locked out?

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

The Attorney General of the day subsequently went into retreat, as he does on occasions like this, and we will have to await his memoirs to hear what happened. This would put special needs assistants into a great many classrooms and provide a lot of additional classroom places. A 50:50 division was regarded as fair by the Department of Finance but the Taoiseach made an unorthodox secret arrangement through the agency of Deputy Woods. There is no point in implying the rest of the House is in any way begrudging the due entitlement of the unfortunate people who were abused and in respect of whom the State did not carry out the invigilation it ought to have done of these institutions.

The Taoiseach

Deputy Rabbitte is not going to have it both ways. I have listened carefully to his points.

Mr. Rabbitte

No, the Taoiseach did not.

The Taoiseach

The figures compiled in the Department of Education and Science and at various times by the Comptroller and Auditor General and the Residential Institutions Redress Board range from 6,000 to 9,000, but 14,000 applications have been made. The State was responsible for these institutions and either ran them or contracted religious orders to do so.

Ms McManus

It did not.

The Taoiseach

I have listened to the Deputy's leader, so the Deputy should listen to me.

An Ceann Comhairle

Allow the Taoiseach continue without interruption.

The Taoiseach

The State placed——

Ms McManus

The State abdicated its responsibilities.

The Taoiseach

I am trying to answer the Deputy's leader. The State placed the children in these institutions.

Ms Burton

It did not look after them.

The Taoiseach

Please allow me to answer the Deputy's leader. The State placed the children in these institutions and was responsible for them. If it had been fought in court, the State would have been jointly liable and——

Ms McManus

Jointly liable.

The Taoiseach

——the State's deeper pockets would have ended up paying the full bill. That is what would have happened legally.

Ms Hanafin

Exactly.

Mr. Rabbitte

Why did the Tánaiste not give that advice at the time, rather than offering it now?

An Ceann Comhairle

Allow the Taoiseach continue without interruption, please.

The Taoiseach

I am answering Deputy Rabbitte's question.

Mr. Rabbitte

It is not necessarily true and the Taoiseach knows that.

An Ceann Comhairle

Deputy Rabbitte took seven minutes despite being entitled to three. He should not take the Taoiseach's time now.

The Taoiseach

He takes that much time every day, as a matter of interest and outside of Standing Orders.

(Interruptions).

An Ceann Comhairle

The Taoiseach, without interruption.

The Taoiseach

Some 14,000 of our citizens were abused in one form or another in State-run institutions. The Deputy cannot say they should be given their due entitlement but that we should not have done it this way. There was no other way but to apologise, which we did, set up a redress system, which we did, and put in a system which would give them fair recompense for what happened to them. That was a fair thing to do. Deputy Rabbitte's view, which I respect, is that the Irish Catholic Church should have paid the money. My view was that it did not have the money and we owed it to these people to pay them back. That was the judgment we made; it was made in a full and open Cabinet decision and I make no apologies for it.

Mr. J. Higgins

A full 12 months have passed since Deputy Catherine Murphy and I first raised in Dáil Éireann the novel phenomenon of management companies being forced on householders in new housing developments, which is especially hitting first-time buyers. We outlined how this was a scam to benefit developers and, depending on which services might be turned over to them, to bring about the possible privatisation of public services. We gave shocking examples of a barefaced rip-off involving no less than six management companies running 1,700 houses in Tyrellstown, leaving aside 400 apartments, which did not even take over public services but almost exclusively built its structure on the management of open air car parking spaces in the estate for which, unbelievably, €360,000 per year is being demanded from the unfortunate householders. It is a cash cow for the developers and the managing agents who take one third of that money each year. I recently exposed a barefaced swindle in Tyrellstown, where €17,000 per year was being demanded from the same householders in fees for public lighting. However, I have established conclusively that Fingal County Council met all the lighting and maintenance costs for the past five years.

Over the past year, the developers in that and other estates, masquerading as management companies, have been trying to drag dozens of householders into court to force them to pay fees which are being boycotted. Happily last Thursday, Judge Alan Mahon in the Circuit Court quashed a demand for management company fees on legal grounds, the important implications of which we are still studying.

The Taoiseach said, in response to the concerns expressed by me, Deputy Catherine Murphy and others, that management companies in housing estates were never envisaged, represented a major problem and an unnecessary cost, and were totally wrong and highly unfair, yet he has not lifted a finger to stop the practice. How serious was the Taoiseach, given that he was in Tyrellstown last Wednesday evening not to extend solidarity to hard-pressed residents, but to open a €40 million hotel for the very developer who is at the heart of the management company rip-off and who has been dragging householders through the courts? Local people who tried to attend the bash were turned away from their supposedly local hotel.

When will the Taoiseach introduce legislation to control management companies for apartment owners and what will he do to quash the ones that exist for thousands of householders who are now caught in a legal nightmare not of their making?

The Taoiseach

Deputy Joe Higgins knows I have considerable sympathy for the arguments around this and I think he also knows I met the group he mentioned at the bash in Tyrellstown, when it raised the points made by the Deputy. I met similar groups in other places. Three things have happened since then. Two weeks ago I reported to the House that the Minister for the Environment, Heritage and Local Government, Deputy Roche, met all the county managers earlier this summer and at the beginning of the year——

Mr. McCormack

They are still making it a condition of planning permissions.

The Taoiseach

——regarding the procedures that were being operated in each of the councils. From what Members said during that debate, a number of those initiatives have been successful in terms of getting coherence in what local authorities do and how they treat housing developments, whether apartments or estates. I have previously made the point that these management companies were intended in the first instance for controlled small apartment blocks. They were not meant for residential housing estates. The Minister has made significant progress with a number of local authorities with regard to implementing the procedures as they were originally envisaged.

The Director of Consumer Affairs recently produced a detailed report in this regard which highlighted issues the Government will have to examine. That examination will be done in the Departments of Justice, Equality and Law Reform and the Environment, Heritage and Local Government. Whether a legislative proposal or other solution will have to be brought forward will be decided shortly, but a lot of the procedures and operational issues which were arising in local authorities do not require legislation. They can be dealt with by the management and I understand from the Minister and his officials that is being done. I will revert to the House when the report of the Director of Consumer Affairs has been examined and a question to the Tánaiste or the Minister for the Environment, Heritage and Local Government will receive a more detailed response on the position with regard to the examination of the report.

Mr. J. Higgins

Apartment owners need a new, simple, democratic and co-operative structure to manage their units. Happily, since Deputy Catherine Murphy and I raised the matter in the Dáil and turned it into a national issue, the local authorities have begun to put a block on this being included as a condition, which represents progress. However, some tens of thousands of householders have been caught in the management company scam in the intervening twilight years, a period of four to five years. They are tied up legally, with the deeds of their houses tied up into the scam, which should never have happened. The Government and local authorities have a key responsibility to those householders. The Government needs to provide the legal means whereby this completely unnecessary structure is taken off the back of those householders.

An Ceann Comhairle

The Deputy's time has concluded.

Mr. J. Higgins

Judge Mahon's judgment in the Circuit Court had the benefit of stripping away the fig leaf. He said the developers should have pursued the householders and not the management company, because the so-called common areas had not been handed over. In other words, it is really the developers who are behind this matter. What will the Taoiseach do for the thousands stuck in this legal limbo? Did the Taoiseach ask the Larkins of Twinlite to stop pursuing the residents who made them such a fortune in buying their homes in Tyrrelstown and in other areas?

The Taoiseach

I thank the Deputy for acknowledging the local authority effort and what the Minister is doing. Based on the present report of the Director of Consumer Affairs, we will see if there is a legislative mechanism to deal with this issue. It is under examination in both the Department of the Environment, Heritage and Local Government and the Department of Justice, Equality and Law Reform. I do not know if there is an easy legal remedy, but I understand clearly the point that is being made by many groups regarding the period in which they were caught. I am not sure where that examination is in the Department of the Environment, Heritage and Local Government — the Deputy can table a question to the Minister. We will see if there is a legislative way to deal with it because I understand the difficulties it has created for several thousand people. I am not sure if it is that enormous a number, but it certainly covers quite a sizeable number.