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Dáil Éireann debate -
Thursday, 2 Apr 2009

Vol. 679 No. 3

Other Questions.

Public Transport.

Damien English

Question:

6 Deputy Damien English asked the Minister for Transport if he has strategies to make CIE financially more self sufficient; his plans to reduce subvention to CIE; the amount of public money given in both capital and PSO, public service obligation, payments to CIE since 1997; and if he will make a statement on the matter. [13792/09]

CIE derives the bulk of its revenue from fare income. The Exchequer subvention to CIE in respect of its public service obligation amounted to 27% of its operating costs in 2007 compared with 22% in 1997. This growth in the proportion of costs accounted for by the Exchequer subvention reflects increased Government support for the provision of more and better public transport services and the increased costs of such services. I expect that CIE and its subsidiaries will, in addition to a high level of Exchequer support, have to rely increasingly on increased fare revenue, cost reductions and efficiencies to ensure their financial stability.

During the period 1997 to 2008, a total of €2.7 billion in Exchequer funding was paid to CIE in respect of compensation for its public service obligations. In the same period a total of €2.9 billion was paid in capital grants mainly in respect of rail development works. The bulk of the current subvention for services relates to rail services, with €191 million or 62% of the total subvention allocated to rail in 2008.

The recently published Deloitte cost and efficiency review reported that the levels of operational subvention of Dublin Bus and Bus Éireann are lower than in other EU member states. The annual subvention paid to CIE in respect of its PSO services has grown from €133 million in 1997 to €313 million in 2009, an increase of 135%. Decisions in respect of the level of funding in the years ahead will be made as part of the budgetary process and, in the case of Dublin Bus and Bus Éireann, taking account of the implementation of the recommendations of the cost and efficiency review. The Government will be seeking to maintain investment in the development and operation of public transport services at as high a level as possible to promote public transport use.

There have been significant improvements, especially in Iarnród Éireann and the infrastructure. I welcome such proposals as the underground DART plans and new signalling on the Malahide route inward, which will increase capacity from 12 to 20 trains per hour and make a substantial difference to the throughput. However, the Minister stated that since 1997 the allocation has increased from €133 million to €330 million. I realise much of that allocation is capital, but Government proposals to increase competition, especially bus competition, have not come to fruition to date. Part of the problem enunciated by my colleague Deputy Broughan today is that dozens of Dublin Bus routes are being cut and some 120 buses will be put in mothballs. This is a result of the policy of the Government not to introduce competition to bus routes, although that was promised ten years ago. Such a move would help to reduce the taxation subsidy to CIE.

I do not accept that there is logic in the Deputy's argument in respect of the introduction of competition. There in competition in the bus market. Anyone can apply for a licence for any route. There are specific issues and considerations related to the issuing of a licence, but anyone may compete. Also, with the new directive in place from December of this year, there must be open competition for any new PSO routes. I do not understand the Deputy's logic of introducing more competition in the Dublin market to save money on the PSO. PSO routes are those on which a subsidy will be required irrespective of whether there is competition. The reason for PSOs is that the relevant routes are not commercially viable.

I agree with the Minister in that PSOs will be necessary for a range of routes. In his first answer on this issue, he confirmed that the public subsidies for Dublin Bus and Bus Éireann were among the smallest in Europe. The latter's 12% subsidy could be contrasted with, for example, two or three companies in the Netherlands that receive subsidies of 50% or 51%. TEC in Wallonia receives a 51% subsidy. Ongoing support for public transport is necessary. Does the Minister accept that it is a public good?

Does the Minister regularly approve business plans for Dublin Bus and Bus Éireann? Was he aware of their significant service expansions, that they were taking on more drivers and so on? Many young drivers who are family men and women have complained to me that the Minister encouraged the companies to employ staff. The new staff, particularly employees with less than one year's service, were caught when he reversed gear due to the lower passenger numbers, which owes to the recession, the Cowen depression or whatever we want to call it. Was the Minister not aware of what was occurring in recent years in both companies? Knowing is one of his statutory duties.

Over the past number of years, my predecessors and I have increased the subsidy substantially. It is not my business to get passengers for Bus Átha Cliath or Bus Éireann. That is a matter for the companies.

The Minister regulates the fares.

I regulate a small proportion of the——

He regulates all of them.

He is the regulator.

Allow the Minister to respond.

I do not regulate all of the fares, as only a small proportion is approved by the Minister.

All of the promotional fares are a matter on which the companies decide and over which I have and seek no control. Dublin Bus and Bus Éireann are losing money because they are losing passengers.

Would the Minister accept——

There is not much point in running buses around the place just to have them running around.

Our Polish friends have gone home. Is that not right?

Allow the Minister to conclude. We have gone over time on this question.

He knows nothing about Dublin.

Some 1.7 million people live in the greater Dublin area. It is a large market. If Dublin Bus management and unions get on with the job of reforming and putting networks, automatic vehicle location systems and so on in place, there will be a bright future.

Deputy O'Dowd can ask a brief question.

The Minister has not seen the key point. Is he aware that when a private bus operates on a PSO route, the taxpayers' subsidy is to the PSO and not to the bus itself? However, both Dublin Bus and the PSO are subsidised on the route. This is the difference.

The Deputy has made his point.

More private buses operating in the Dublin Bus area would reduce the cost to the taxpayer. They operate in the Bus Éireann area. This is the difference between the two companies. Bus Éireann has a relationship with private contractors and Dublin Bus does not.

As we had gone well over time, I allowed the Deputy on the understanding that he would be brief.

I was just making my point.

On a point of information——

As the Deputy knows, there is no such thing as a "point of information".

It is a Thursday point of information.

He can ask a brief supplementary question.

Regarding this matter, why do Fianna Fáil and Fine Gael not form a national Government and allow the Labour Party to be the Opposition? We have nothing in common with their positions.

The Labour Party has nothing in common with the public.

I hope that, after the next general election, Deputy Broughan will remember that his party has nothing in common with Fine Gael. People outside the Houses know this and will return a Fianna Fáil-led Government.

Deputy Broughan has nothing in common with his own party.

State Airports.

Leo Varadkar

Question:

7 Deputy Leo Varadkar asked the Minister for Transport the cost incurred in implementing the decision to separate the State airports before the decision was taken to postpone this separation; and if he will make a statement on the matter. [13846/09]

Last December, I announced the deferral until 2011 of a decision on the separation of the three State airports under the State Airports Act 2004, given the difficulties in the aviation market. Up to that time, the boards of Cork and Shannon airports were required to finalise business plans for eventual separation for approval by both the Ministers for Transport and Finance. This necessitated the procurement of advice from consultants at a cost of €334,000 on the financial and operational readiness of the airports for separation. This advice related to an assessment of the financial and other conditions necessary to facilitate separation, the evaluation of business plans and the resolution of certain issues identified in the business planning process. Professional advice was necessary to enable me to make an informed decision regarding the separation.

The two major elements comprised work undertaken by PricewaterhouseCoopers at a cost of €292,000 on aspects of State airport business planning and additional work, costing €42,000, undertaken by Mr. Peter Cassells that mainly dealt with the treatment of Cork Airport's debt in the context of separation.

I presume that the airports incurred other costs. Could the Minister request the figure, which is the thrust of the question? I accept that money has been invested, but the Act was passed in 2004 and we will wait until 2011 until it is acted on. What value for money will we receive as a result of the Government not proceeding with the implementation of the Act?

I will get the information for the Deputy. I do not have it to hand, but I will request it from the airports.

Regarding the second part of the Deputy's question, I agreed to the deferral of the separation following a request from the three airport authorities. They believed that separating at this time would be serious, an assessment with which I agreed. Had we gone ahead with it in the current climate, the costs involved would have been more serious.

The Labour Party believes that serious costs would have been involved in any climate. Is it not time to abandon this crazy plan in the 2004 legislation and to restore Aer Rianta so that a proper national company can run the three airports? The Dublin Airport Authority, DAA, being in charge of some aspects of Cork and Shannon airports is ridiculous. Let us have Aer Rianta back.

What is the current debt of Dublin Airport and how will it be met? What is the current debt of Cork Airport and how will it be met? What is the current debt of Shannon Airport and how will it be met?

I do not have that information to hand, but I will try to get it for the Deputy if he tables a parliamentary question. If the terminal 2 and runway developments at Dublin Airport had gone ahead during the height of the building boom, the debt would have reached approximately €1.2 billion. Obviously, it would not reach that high now.

The debt is financed in a simple and straightforward manner. It is financed by income to the DAA from all of its air and terminal activities. I will get the specific details on the debts.

I understand that the airports were not split up because of their disagreement on which should take accountability for the debt at, for example, Cork Airport. There was a row between Dublin and Cork as to how much the latter would pay.

Ask a question Deputy.

The principle of the Act was to make the airports separate with their own business plans so that they could develop independently and grow stronger. Since the separation will not occur, we wasted money and the time of the Oireachtas on the legislation.

I am not sure that was a question. I will allow both Deputies to make their points.

How much has been spent on the boards of Cork and Shannon airports since the 2004 legislation was implemented? How much has been spent on this madness in the past four or five years?

What is the agreed debt level with which Cork Airport has been saddled? The commercial representatives of Cork, such as its chamber of commerce, were very upset when €120 million to €130 million was landed on top of them for their new terminal, rather than being supported by the entire nation.

I do not accept Deputy Broughan's premise, which is the opposite to that of Deputy O'Dowd, that the idea of the separation of the airports was madness or anything like it. It is easy for Deputy Broughan, whose constituency is close to Dublin Airport, to make such statements but people in Cork and in Shannon——

I support all the airports.

——had a distinct feeling that Aer Rianta and the Dublin Airport Authority — I do not comment on whether such a perception was true——

They did not do what the Minister did to Shannon.

They had the distinct impression that Aer Rianta and its successor——

Has the Minister forgotten something about Shannon?

Allow the Minister to reply.

He forgot that he was informed about Shannon

——were completely Dublin-centred and were initiating and following policies that suited Dublin Airport, rather than all three airports. There was a strong perception to that effect——

Why did the Minister not move it to Cork?

——on which I will not comment one way or the other.

Agreement had been reached. Part of Mr. Peter Cassells's remit regarding Cork was to come forward with proposals for a final resolution of the discussions regarding debt levels for Cork. My recollection is the net debt Cork Airport would be obliged to meet was just under €100 million.

Seán Barrett

Question:

8 Deputy Seán Barrett asked the Minister for Transport the contingency plan in existence in the event of wide-scale strikes in major airports here; the contact he has had with the Dublin Airport Authority and the unions in order to avoid wide-scale disruptive actions at airports; and if he will make a statement on the matter. [13759/09]

The Dublin Airport Authority, DAA, has statutory responsibility to manage, operate and develop Dublin, Cork and Shannon airports and, as such, the preparation of a contingency plan in the event of a strike is a matter for the DAA.

In fulfilling its remit, the DAA seeks to ensure that the maintenance of continuity of service across the wide range of services it provides to airlines and passengers. I understand the DAA has strategies, policies and contingency plans to deal with unforeseen events and managing crisis situations, including those situations where service is disrupted. A key aim of the DAA is to have systems that reduce the potential for disruption in the first instance and, where the disruption occurs, to manage the safety and security of passengers and airport employees.

The risk of disruption due to industrial action by any grouping of its core staff can be minimised by a willingness to engage with and use the industrial relations machinery of the State when matters of dispute arise. In this regard, I am informed the DAA has a registered agreement with the Labour Court that provides for a no strike clause in respect of potential industrial action by the fire and police emergency services during the lifetime of the agreement. Issues concerning the scope or alteration of the agreement are resolved through the normal third party mechanisms and, if necessary, through binding recommendation of the Labour Court.

I am satisfied that both DAA management and unions are engaged in talks to resolve the outstanding labour relation issues under the auspices of the Labour Relations Commission and, consequently, the threat of closure of the airports on 2 April has been withdrawn.

While I thank the Minister for his response, I suggest the key issue in this regard is a no strike clause for everyone who is involved in critical transport infrastructure, such as airports, and that this is where Government policy should rest. The aim should be to get a no strike clause to protect the public and the economy in respect of critical infrastructure such as airports. I stress that I greatly welcome the decision of the unions' leadership not to hold that strike. However, it had a significant impact because it was threatened and, consequently, people cancelled business deals and transport plans. It is not good enough, in the 21st century, that anyone can threaten such a strike at such a critical period. Basically, it constitutes economic sabotage and we must opt for no strike clauses for those involved in critical transport infrastructure such as the airports. I seek the Minister's views in this regard.

Like the Deputy, I welcome that this strike did not go ahead. However, I also accept his comments to the effect that even the threat of an industrial dispute that might close the airport has a disruptive effect. It causes both uncertainty and people to change plans and perhaps to make alternative arrangements. It is not something that I like to observe and I agree with the Deputy in this regard.

As I noted in my reply, a no strike clause is in operation in respect of fire and police emergency services during the lifetime of the existing agreement with the DAA. I would welcome its extension across the entire range of essential services. In this day and age, both management and unions should be able to resolve their difficulties through the normal industrial relations mechanisms of the State. I encourage them to so do and encourage the trade union movement to engage with management to try to ensure that this happens.

First, I wish to comment on the great dignity shown by workers in Dublin Airport across a number of companies. Recently, for example, Aer Lingus workers negotiated a complete downgrading of their jobs and conditions to help the company to survive and they did so in a most dignified and responsible manner. The national leadership acted similarly in respect of the Dublin Airport Authority workers and above all, in the past five or six weeks, the SR Technics workers have shown enormous dignity and courage. They have tried, in a dignified, calm and responsible way, to preserve their jobs and get their basic entitlements. This is the reality and not the ráiméis one hears in this House from Fine Gael or the talk from Ryanair about bringing in the Army. The only person in Ryanair who gets to negotiate his own salary is the chief executive himself, who has the best of professional advice.

My understanding is that, as I speak, the management buy-out team at SR Technics is negotiating with IDA Ireland, under the auspices of the Department of Enterprise, Trade and Employment, to try to preserve the jobs at the company and to ensure that 600 skilled men and women will not be on the streets and signing on tomorrow morning. I have to hand a recent e-mail sent to the Labour Party leader from the representatives of the SR Technics workers to the effect that they desperately need time from the SR Technics management team in Zurich, Abu Dhabi and Dubai to allow them to put in place the structures that will retain the vast bulk of those jobs. Can the Minister offer his support in this regard this evening?

Earlier today, I asked the Taoiseach, Deputy Brian Cowen, and the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, whether the Tánaiste would contact Sheikh Mohammed Al-Maktoum, who is the Emir of Dubai and the Prime Minister of the United Arab Emirates. As the Leas-Cheann Comhairle may be aware, he owns 100% of SR Technics in Dublin, Zurich, Stansted and the Middle East. I have asked our leader to talk to the owner of SR Technics to ask him——

I have given the Deputy some latitude——

As a final point, I understand that Sheikh Mohammed and the United Arab Emirates consider themselves to be friends of Ireland and that they would be prepared to allow the kind of time that is needed to avoid the scenario in which valiant and highly skilled workers, who are among the most skilled in——

We have had a question on this matter and I do not want——

——Ireland, will be walking the streets tomorrow. As I stated, they have behaved in a most dignified and responsible manner. Were the Minister to do this, I would appreciate his initiative.

While I am anxious to give some latitude, I must now call on the Minister. This is well beyond the scope of Question No. 8, with which we are dealing.

While I will try to remain within Standing Orders in this regard, the Deputy can be assured that anything the Government can do, through the Tánaiste and Minister for Enterprise, Trade and Employment in respect of SR Technics, will be done.

Does that include contacting the owners, which the Government has not done heretofore?

Last Friday, a deputation, which I was unable to meet, asked for a postponement of the sale of some tooling equipment and so on. My Department immediately passed on that request to the Department of Enterprise, Trade and Employment and the sale subsequently was deferred. Anything the Government can do and that is within its power certainly will be done to try to ensure that as many jobs as possible are preserved. That is what is happening in respect of the agencies such as the IDA and so on. If a viable alternative exists, the Government does not wish to see such highly skilled workers losing their jobs. We will do everything we can to avoid that situation arising.

Light Rail Project.

Richard Bruton

Question:

9 Deputy Richard Bruton asked the Minister for Transport the amount of money that has been spent on enabling works for all proposed rail projects; if the Department of Finance has been in contact with him regarding the metro north project; when he expects Government commitment for the metro north project; and if he will make a statement on the matter. [13763/09]

Enabling works on rail projects, such as ground clearance and utility diversions, generally follow the granting of a railway order and are incorporated into the overall cost of projects. No Exchequer funds are currently being spent on enabling works in respect of rail projects, other than metro north, which have not yet secured an enforceable railway order and are, as a consequence, not yet at construction. However, planning and design work, which is at various stages of development on such projects, is ongoing.

The Government approved the funding structure for the metro north PPP last year, including an Exchequer provision for advance works ahead of the main PPP contract and a capital contribution during construction. Since that Government decision, approximately €8 million has been spent by the RPA in respect of enabling works at the Ballymun Interchange on the M50 and at the Mater Hospital site. The works at the Mater site are associated with the interface between metro north and the planned new hospital at the Mater. In the absence of the enabling works at the Mater site, it would not have been possible to provide a station at the location as planned, given that the works being undertaken to deliver the new adult hospital. The works on the M50 were undertaken as part of the current works to widen the M50 to avoid further disruption at a later date with works on metro north. The carrying out of other enabling works, such as utility diversions, is dependent on the granting of a railway order by An Bórd Pleanála.

The oral hearing before An Bórd Pleanála on the railway order application for metro north commenced yesterday and the board has indicated its anticipated decision on this application to be before 4 September this year. In these circumstances, it is most unlikely that enabling works will commence in the current year. However, both the RPA and my Department will keep the matter under review.

It is my intention to brief the Government after the decision on the railway order is made and prior to the main enabling works commencing. My Department will also continue to be in regular contact with the Department of Finance on metro north and other Transport 21 projects. I understand from the RPA that tenders for the metro north PPP were submitted by the four bidding consortia in February this year and these are currently being evaluated by the RPA. It is anticipated that the tender process will be completed during 2010. In accordance with the requirements of the Government decision on Transport 21, metro north will be submitted to Government for a final decision at that stage.

Is the Minister saying that metro north will proceed at the end of this process? The 7,000 construction jobs will be very important, as will the economic benefit to the country, particularly the greater Dublin area, Fingal and beyond. The cost is the key question. While everyone supports the project, the cost of the project must be identified as quickly as possible. We were told we could not know what this would cost because of the secrecy of the ongoing process. Does it make sense for the Comptroller and Auditor General, or some such body, to verify that the costs are in line and that the project represents good value for money? We have no doubt that metro north is important for the development of the country, the airport and Fingal but it is important that there is an accountable process, independent of the Government, to verify that costs are fair and proper.

There are a number of reasons why costs are not disclosed in advance. One is to ensure that estimated costs do not become the floor rather than the ceiling, as happened in so many projects.

Once we have the railway order, the preferred tenderers will be asked to submit the final tender once they know the route and the works involved. Once that is submitted a full capital appraisal will be undertaken, independently of my Department, by the Department of Finance.

Will that be published?

That will take place at the final stage and the overall cost will be published. A number of assessments have been done on the rate of return from metro north and all proved positive. Either the current Oireachtas joint committee or the previous one carried out an appraisal of the cost-benefit analysis and professed itself satisfied with the good rate of return and recommended that the project go to the next stage. If it represents good value for money it will go ahead.

With the indulgence of the Leas-Cheann Comhairle, I wish to report a note from the wonderful Labour Party staff to the effect that the IDA and an investor have agreed terms for the takeover of SR Technics. The new owners will need two weeks for due diligence, during which SR Technics will be required to pay staff, which they are refusing to do at present. I renew my call for the Minister to help to save these jobs, which are on a knife-edge. This needs diligent action.

I have had differences with the Minister this morning and yesterday but I commend him on holding the line on this major project, metro north. It will be a case of "build it and they will come". It is a great project and in the years after 2015 the costs will run to €150 million per year. It is within our grasp.

Regarding the broader transport capital budget, we saw a range of project cancellations last week. Our media colleagues tell us that the Departments of Transport and Education and Science have the highest level of committed and non-contracted money. Is that the case? Of the €3.5 billion, will a significant portion be cut away by the Minister for Finance?

The Deputy cannot pre-empt the budget or the budget debate.

What is committed and non-contracted? What is the Minister doing about it?

I do not know what they mean. I have put figures in the public domain previously.

The money is not down for spending yet. Contracts have not been signed.

While it has nothing to do with the question, some €1.44 billion is contractually committed out of a total of approximately €1.9 billion. Of a further €500-600 million for local authorities, some €126 million has been committed, accounting for another €300 million. The bulk of the national roads funding is committed, all except the €50 million. We did not cancel any of the projects listed in the newspaper reports but, in line with the question tabled by Deputy O'Dowd on local roads, the Department was told it would need specific sanction and none would be granted until after the capital and current expenditure would be decided in the budget.

Ferry Services.

Jim O'Keeffe

Question:

10 Deputy Jim O’Keeffe asked the Minister for Transport the ferry links existing between Ireland and the UK and continental Europe; if there are proposals for further such ferry links; and if he will make a statement on the matter. [13722/09]

Jim O'Keeffe

Question:

37 Deputy Jim O’Keeffe asked the Minister for Transport his views on the establishment of further sea ferry links into and out of Ireland; and if he will make a statement on the matter. [13723/09]

I propose to take Questions Nos. 10 and 37 together.

It is important that the market offers a diverse range of viable maritime links in and out of the State to facilitate trade and tourism. Ireland is well served by ferry links to the UK and continental Europe. These links are frequent and competitive. The full list of services can be viewed on the website of the Irish Maritime Development Office. Any new service must be market driven. It is not Government policy to fund international ferry services. Ireland has one of the most extensive short sea networks in Europe with multiple operators and various alternate modes of shipping available. In the past decade, there has been an 80% increase in the number of services between Ireland and the UK and European markets.

Shipping operates in a highly liberalised global market environment, which has enhanced competition on the key Irish routes. The ongoing development of our shipping network has provided the Irish market with more competition, choice and frequency in accessing the global market.

The loss of the Cork to Swansea connection has had a significant and adverse impact on the local economy, particularly in east and west Cork and south Kerry. Is the Minister of State aware that the local communities have made available a fund of €3 million to help restore this service? I understand there is a ship in one of the Nordic countries which could be purchased in order to return to the local economy the benefit of the link between Cork and Swansea. It is very important, particularly for tourism, and tourism interests are particularly concerned at the service's absence. What steps will the Minister of State now take with that €3 million in order to immediately restore this essential economic service to the area?

I am aware of the campaign to try to open the route again. An examination of the proposals has taken place and it has been said that subject to getting a suitable vessel, with the one mentioned by the Deputy being targeted——

It is available.

The report indicates the service could be viable on an all-year basis and I hope the efforts to get the service running are successful and it can be shown to be commercially viable. The Port of Cork and the Irish Maritime Development Office have both been in touch with the promoters and are trying to be as helpful as possible. We do not provide any State subsidy for such a route but I hope the proposals will be successful, the ship can be acquired and the service will get up and running again.

I warmly support those comments. The Welsh Assembly and local interests in Cork estimate that the Cork to Swansea ferry was worth approximately €70 million to the two economies and it is therefore critical that we get it up and running again.

In general, it seems to some who observe ferry connectivity with Britain that such connectivity is declining rather than increasing. There are threats to Stena coming out of the port of Dún Laoghaire into Holyhead and sailings have been seriously cut back to one per day. Is the Minister of State aware of that and is the Department taking any initiatives to try to increase connectivity from Ireland out of Dún Laoghaire, Cork and our other ports not just to Britain but to continental Europe?

There is a considerable range of routes and services at present. Over the past ten years or so the overall capacity has increased significantly. I accept the Deputy's comments regarding Stena. Many of these services are partially passenger based but they are also freight based. Politicians and other interested groups consider the tourism perspective and more people are probably flying in recent years and fewer going by sea routes. What keeps the businesses going around the year is the freight rather than passenger side of things. Roll-on, roll-off freight has probably declined less than lift-on, lift-off or other bulk traffic during the world recession. There is a big capacity of routes, although I accept passenger and car routes such as Dún Laoghaire or Dublin Port are not what they were. They are not as popular as they were ten years ago.

Written Answers follow Adjournment Debate.

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