Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 28 Mar 2012

Vol. 761 No. 1

Priority Questions

State Airports

Timmy Dooley


1Deputy Timmy Dooley asked the Minister for Transport; Tourism and Sport when he expects to make a decision on the future of Cork and Shannon Airport; and if he will make a statement on the matter. [17163/12]

The Deputy's question relates to the timeframe for making a decision on the future of Cork and Shannon Airports.

As I previously informed the Deputy, following receipt of the Booz report on the future ownership and operation of Cork and Shannon Airports, my Department is currently involved in detailed engagement with all relevant stakeholders on the issues involved.  When that process has been concluded, I will bring proposals on the future of these two airports to Government as soon as possible.  It will be a matter for Government then to make a decision on the issue.

My own view is that the current half-way house arrangement in place since 2004, whereby Cork and Shannon have their own boards but have limited autonomy from the DAA, cannot continue indefinitely. My objective is to have viable and sustainable operations in each of the three State airports, whatever structure is ultimately chosen by Government, and to make the necessary decisions in this regard in this year.

I thank the Minister. There is nothing particularly new in the statement he has just made. My understanding was that the Minister had said in the past that he intended to announce before Easter his decision on the future management and control of the two State airports, namely, Shannon and Cork, and that it was his intention to bring forward legislation by the end of the year. If it has not been brought to Government as of now, can we take it that a decision will not be made before Easter? Can I take it also that an announcement on the future of Shannon Airport will not be made during the Minister's visit to Clare on Friday? It would be helpful if he could give us a more definitive time as to when he intends to deal with the issue I have outlined to him on a number of occasions.

I am not trying to suggest in any way that it is not a difficult decision or that the Minister does not have many considerations to take into account, but he now has the benefit of the Booz report which sets out a number of key options. I am aware the Department has engaged with stakeholders to try to ascertain the best solution. There are many factors that require appropriate attention, particularly regarding the way the Minister would subvent or provide for Shannon Airport over a period of change. Clearly, all of those factors must play into any decision he would make. It would be helpful to all concerned if the Minister could give more clarity, first, on the timeframe for a decision of the Government and, second, when we will see the effects of that decision.

I thank the Deputy for the question. I will visit Limerick tomorrow and Clare the day after that to speak at a business function which I agreed to do several months ago and, therefore, there will not be any dramatic announcement on Friday that I would not make to the Dáil beforehand.

The position is that the Booz report has gone to Cabinet. It is being considered and has been published in redacted form, which I am sure the Deputy has seen and discussed at this stage. The entire issue involves engagement with various parties including the Department of Public Expenditure, which is a shareholder, and Shannon Development. The future role of Shannon Development is tied up with this and there is an engagement with the Department of Jobs, Enterprise and Innovation on that point. Also, the DAA Group is doing some work on the issues around separation and the barriers that would have to be overcome. It is taking a little longer than I might have hoped but very good progress is being made and it remains my intention to bring a decision in principle to Government in April, although it may be a week or two after Easter rather than before Easter as I had initially intended.

I thank the Minister for his clarity in that regard. Whatever the decision might be, I have made my position clear on a number of occasions. There is a necessity to retain the three airports under the CIE model we have talked about and identified in the Booz report. The importance of Shannon Airport maintaining its capacity to survive without access to funds is of great concern to many people in the region. In that regard, I urge the Minister to give serious consideration to the capacity of Shannon Airport to be able to continue to rely on a line of funding from the DAA in any structure he brings forward.

Whatever we do has to be a success and for an airport complex to be a success, it should not be reliant on subventions and should be able to break even, at the very least, and ideally turn a profit. We are moving away from the model of subventing airports. Subvention has had to be removed already from Galway and Sligo Airports as a result of cutbacks in public expenditure. The other regional airports have been informed that they will be expected to break even on an operational basis by 2014. Neither Shannon nor Cork Airports receive Exchequer moneys but I suppose one could argue that they receive an indirect subvention as being part of the DAA Group. If any model is to be a success, whether it is a CIE type model or independence, it is not a success if an ongoing subsidy or subvention is required. All of these airports should be able to turn a profit and at least break even. If it is the case that an interim arrangement is needed, so be it but the objective in the medium to long term should be a vibrant, profitable successful airport complex with many employees creating employment and revenues for the region and not something that is dependent on other people's labours, taxes and revenues just to exist.

Sports Capital Programme

Sandra McLellan


2Deputy Sandra McLellan asked the Minister for Transport; Tourism and Sport the amount of funding available under the sports capital programme; the criteria for the different levels of funds; the cap, if any, on the funding criteria; if all areas will be included on this occasion; the closing date for applications for funding; when it is hoped that funding allocations will be approved for applicants; and if he will make a statement on the matter. [17162/12]

I am pleased to advise the House that earlier today I announced a new round of the sports capital programme.

Allocations of €30 million which will benefit sports clubs, community groups, local authorities, schools and national governing bodies of sport will be made in the late autumn or early winter of this year.  Applications will be accepted from all areas of the country.

A maximum grant of €300,000 may be applied for by local clubs and groups. National and regional projects may apply for a greater level of funding but these projects must be designated as such by the national governing body of that particular sport.

Online applications and those made in Irish, along with a hard copy of the signed application form and all supporting documentation, must reach the Department's offices in Killarney by 5 p.m. on Friday, 1 June 2012.  Paper-based applications and all supporting documentation must reach the Department's offices in Killarney by 5 p.m. on Friday, 11 May 2012.

All applications received by the closing dates will be assessed on the basis of a number of criteria such as the effect the proposed project will have on active participation in sport and the level of socio-economic disadvantage in the area. Application forms and more information can be obtained on the Department's website at

I thank the Minister of State for his comprehensive reply. He has answered most of my questions in great detail. I am delighted that he has announced today the sports capital programme on which he must be congratulated. The importance of sport in the life of a person is invaluable. Since the announcement of the sports capital grant programme in the budget, numerous sporting clubs and organisations have contacted me asking where and how they can apply and the criteria involved. I had a telephone call from a constituent 20 minutes before I came into the Chamber regarding a handball alley in Mallow because he heard the announcement on the 1 o'clock news. I told him I would revert to him today with the details.

Are the Gaeltacht areas included in the programme and are the application forms available as gaeilge? With the scarcity of resources and money, what are the Minister's views on some of the clubs and organisations sharing resources? Will this programme target disadvantaged areas?

I thank the Deputy for her kind words. The Deputy is correct. This is the first time since 2008 that we have had a new round of the sports capital programme. It was difficult enough to get the funding and I compliment my colleagues who supported me very strongly as establishing this programme was a commitment in the programme for Government. The Deputy is quite correct that clubs throughout the country want to upgrade their facilities.

The Deputy asked me three questions. Gaeltachtaí are included; they were not included in 2008 but they are now. Everybody in the country is included and can make an application. Application forms will be available in Irish and applications can be made as Gaeilge. With regard to disadvantaged areas I have decreased the local contribution in RAPID areas from 10% to 5% and in CLÁR areas from 15% to 10%. The overall contribution for people outside of these areas will be 15%.

We have also made the forms easier for people to understand so it will be easier for them to make applications. I will not state it will be any easier for them to get funding as there will be a big demand for it. What I am saying is that the fund is open now and I have broken it down into two categories with €26 million for projects under €300,000 and €4 million for regional projects. It is a good news story. The Government made a commitment on this and sports capital funding is now open. Everyone has an opportunity to make an application.

Under the previous Administration certain areas benefited a little more because there were Ministers in the area. Will the Minister of State agree this should be an example of the programme for change?

That leaves Mayo out.

I am speaking about Cork East in particular.

The Deputy is a bit like the media who think because I have become a Minister of State that I cannot represent my constituency. I want to tell the media I will represent my constituency. I am not speaking about grant aid, I am speaking about health, social welfare and agriculture. To answer the question, every application will be judged on its merit and criteria will be set.

The Deputy asked about shared facilities and she is correct in what she said. We want to target facilities that will be shared and used so we do not have facilities throughout the country lying idle for the summer months, at weekends or during the week. Facilities should be made available. This country has limited resources and the programme will provide €30 million. On a previous occasion it provided €100 million but we expect to get better value now. We expect costs to decrease by 30%. We believe many of the costs on the previous occasion were inflated. Many clubs took on schemes and never finished them or drew down the funding because they ran into difficulties. We hope to target disadvantaged areas and facilities that will be completed, particularly from the bottom up. This is my proposal and I hope to carry it through.

Transport Costs

Mattie McGrath


3Deputy Mattie McGrath asked the Minister for Transport; Tourism and Sport the measures he plans to introduce, if any, to assist the licensed Irish road hauliers who are struggling as a result of the price increases in fuel tax; and if he will make a statement on the matter. [17161/12]

The Deputy's question relates to fuel costs and their impact on the haulage industry, and measures being undertaken to assist the industry. I am aware that costs generally for haulage operators are increasing, and fuel is a major component of this. The price of fuel is driven mainly by external factors such as the cost of oil, refining costs, and exchange rates. All of these are driven by international factors and the Government has no control over them.

Taxes and fuel duties are a matter for the Minister for Finance, and are not ones in which I have any direct role. However, I should make the point that VAT is refundable to hauliers as a business expense. With regard to excise duty, I am aware the Irish Road Haulage Association, IRHA, has proposed a fuel rebate scheme to the Minister for Finance. I understand a working group between the IRHA and the Department of Finance has been established to discuss this matter and that two meetings have been held to date. However, I am not a party to these discussions, and the Deputy's questions on such would be best directed to the Minister for Finance.

I acknowledge the current economic climate creates difficulties for many sectors, including road haulage. In that regard I am seeking to work with the industry on those matters which fall under my remit and in which progress can be made. In this regard, following representations from the industry and after consultation with the relevant road safety bodies, I increased the speed limit on motorways for heavy goods vehicles to 90 km/h. Furthermore, I recently met with my UK counterpart, the Parliamentary Under-Secretary of State for Transport, Mr. Mike Penning, to discuss issues related to cabotage on foot of concerns raised by the haulage industry about enforcement by the UK authorities. I have also engaged with the industry on the issue of vehicle weights, and recently increased to 46 tonnes the maximum weight for six axle vehicles. This will come into force in July of this year.

In addition, a project is under way in the Department which will make some contribution to improving licensing arrangements and reducing operational costs when completed. The Department is working on a new computer system which will include a facility for online applications for haulage licences and amendments to licences by the end of this year. This should reduce the time, effort and costs required by operators to obtain the licensing documents and certificates they need.

I thank the Minister for the efforts he is making and I compliment him on the small measures he has taken. The huge cost involved is fuel and increases by previous Government and this Government through the carbon tax and the increase in VAT have made it almost impossible. Two or three hauliers flee the industry on a daily basis because of the huge cost of fuel. When they go abroad they fill up and we are losing tax and excise through this. It costs between €1,200 and €1,400 to fill a lorry's fuel tank which is frightening. Something must be done. The Minister met the Irish Road Haulage Association twice but it is not satisfied with the answers it received. They must compete with those who undermine them with laundered fuel and the rebate is just paying lip service. I welcomed the measures to be introduced in July with regard to weight and speed. However, fuel is a bigger problem and it is not true to say the Minister does not have control over its cost. Tax accounts for more than 50% of the cost of fuel.

I acknowledge the cost of fuel affects everyone and not only hauliers. It affects anyone in the general public who drives a car. It also affects the CIE companies and I have a good insight into what the balance sheets of a haulage firm looks like because I see the CIE accounts and I can see how the loss of the fuel rebate and increasing fuel costs hit it. The Minister for Finance did not increase excise on fuel in the budget; he increased VAT. The reason for this is the VAT is recovered by the haulage industry. The only increase the Government has added to the cost of fuel from the point of view of the haulier is a 1.6 cent increase through the carbon tax. All other increases in the past year are down to international factors beyond the control of the Government. We need to recognise that while fuel prices will increase and decrease it is a finite resource and there is an increasing demand for fossil fuels. The overall trend in the coming ten, 20 or 40 years will be upward and in 20 or 30 years time fuel will be extremely expensive. We must bear this in mind when future-proofing our policies and considering how we will move goods around the country.

The issue of fuel tourism is being studied by the Department of Finance. If it is proven we are losing revenue overseas because of people filling up in Belgium instead of Ireland the Department of Finance will consider a change in this regard. It is also important to point out that while transport companies and hauliers lose money and many are in severe debt nobody in business is losing €15 billion a year and has debts of €160 billion. The Government does, so any action it takes must be revenue neutral at the very least.

I do not accept that. As I stated, they are going out of business by the hour literally. The Minister said anyone who drives a car knows about the increase and we can see it in the price at the pumps. At best trucks do between 3 to 6 miles per gallon so it is a major cost. This is aligned with the fact they receive less income from the companies for which they work because everything is being cut. They are in a stranglehold. We must recognise this valuable industry and try to safeguard it against attacks from the fly-by-nights and rogues. One way to do this would be to deal with laundered diesel, which is a disaster. It is illegal and a fraud but still continuing. I hope the Minister for Finance will listen to the Irish Road Haulage Association because we will not have an industry if we continue like this.

The road haulage industry is extremely important and we will always have one of some size or another because it is how we get our goods to market and moved around the country. We will always have a haulage industry even if it is contracting and may contract more. The issue of laundered diesel is a matter for the Minister for Finance and I know he is taking an interest in it. The working group is making progress in this regard. Any solution we come up with must be revenue neutral and must bear in mind no matter what we do the trend in fossil fuel prices will be upward. We will change the way we run our country because of this.

Tourism Industry

Timmy Dooley


4Deputy Timmy Dooley asked the Minister for Transport; Tourism and Sport the number of jobs in the tourism sector created by lowering the rate of VAT for certain sectors as announced in the jobs initiative; and if he will make a statement on the matter. [17164/12]

The Deputy's question relates to the number of jobs created in the tourism sector as a result of the lowering of the VAT rate for the tourist industry. As the Deputy will be aware, the jobs initiative introduced a reduced 9% VAT rate from July 2011 on a range of services, including hotels, restaurants and the leisure industry. The Government also halved employers' PRSI for those on modest wages and introduced a visa waiver scheme, which makes Ireland more accessible for tourists from important emerging markets.

It is too early at this stage to definitively assess the impact of these measures on tourist numbers or employment in the sector.  We will need to consider the figures over a longer period to properly assess the impact of the initiative. It will be later this year before a view can be formed on the effect of these measures on competitiveness and employment. I am, however, pleased to report that overseas visitor numbers increased by 7.8% in 2011 by comparison to 2010. This growth has continued into 2012, with trips to Ireland for the first three months up to February 2012 having increased by 2.7% as compared to the corresponding period of December 2010-February 2011.  I am also encouraged that seasonally adjusted employment as measured by the CSO in accommodation and food services increased by 11,000 during the nine month period to end December 2011.

Improving the perception among domestic and overseas visitors that holidaying in Ireland offers good value for money was an important part of the jobs initiative. In this regard, I draw the Deputy's attention to the most recent Consumer Price Index which shows that in the year to February 2012, the price index for restaurant and hotels was down 0.3% and for recreation and culture related products and services was down 0.9%. As such the sector is becoming more competitive. The overall CPI was up 2.1% during the same period. These price reductions were driven by a wide number of factors, including the VAT reduction, and are showing the increased competitiveness of the Irish tourism market.

I welcome the Minister's clarity on this issue. However, his colleague, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, stated on 25 January in reply to a question from my colleague, Deputy Willie O'Dea, that the number of people working in the tourism sector had as a result of the VAT reduction increased by 6,000 and, therefore, the initiative was working.

The Minister's response is in line with that which he gave in an ad hoc questions and answers session to the Irish Hotels Federation when he advised it that seeking an extension of the lower rate of VAT just because the industry was struggling was not a strong enough case. The Minister stated that it was necessary to show that jobs were being created and followed this up by saying that he was not sure this was the case in terms of the VAT reduction. Like others, I believe it is difficult to indicate if an increase or reduction in VAT would have the impact expected. Therefore, I welcome the figures outlined by the Minister in his reply. There appears to be a bit of spinning, although on behalf of the Minister’s colleague, Deputy Bruton, rather than by him.

The Minister appeared to indicate that the VAT reduction might not remain in place for 2013. He will recall that it was factored in for 2013 in the jobs initiative. The raid by Government on the private pension fund of €450 million per year is also factored in for 2013. Is it the Minister's expectation that if the VAT reduction does not remain in place for 2013 the Government will not be raiding the private pension fund to the extent projected?

The Minister, Deputy Bruton, referred during an interview to an increase of 6,000 people in employment in the tourism sector. The situation has improved further since the most recent figure became available. To date, there has been an increase of 11,000 in the number of people working in the food and accommodation sector. However, this represents only a partial recovery on the large number of jobs lost in this past year. It would be facile to suggest that the reduction in VAT necessarily resulted in that increase in employment numbers. However it is a good sign nonetheless, by which I am encouraged.

The point I made to the hoteliers is a valid one, one which applies to the tourism industry as a whole, namely, industries will not get concessions because they are struggling - everyone is struggling. Concessions will only be given to industries which can deliver results in terms of increased revenues to the State and increased employment. It is hoped the industry will take this on board in terms of its hiring policy during the summer. The more people hired the more likely it is to retain the VAT reduction in 2013.

Will the Minister accept that if Government sets out on a course and indicates a certain provision will be made for three years, that it would be entirely wrong to cut that provision after only two years? Will he further accept that his comments, while well meaning, do not provide the type of certainty which people in this industry need. Much of the tourism sector depends on advanced bookings and on putting in place a strategy for the years ahead. The jobs initiative provided certainty in terms of confirming the Government would provide a particular support to the industry for a three year period, in respect of which the revenue was identified, namely, the raid on the pension fund. The Minister now appears to be raising some doubts about whether the reduction will remain in place for 2013. Perhaps he will confirm that he expects that the Government will continue on the course set out in the jobs initiative.

The plan is that the reduced VAT rate of 9% will continue until the end of 2013. As stated by the Deputy, that is what is promised in the jobs initiative and the legislation and is what is stated on the Revenue website. The industry should work on the basis that the reduced rate will continue until the end of 2013, the year of The Gathering. Having said that, I am not writing the budget now.

I accept that.

I do not want to give people an assurance which may change. We do not know what will happen between now and budget day or what will happen to the economy, the deficit or in regard to other matters. I do not want to be strung up by the Minister for Finance for making promises on his behalf. The intention is that the lower rate will continue to the end of 2013.

Public Transport

Richard Boyd Barrett


5Deputy Richard Boyd Barrett asked the Minister for Transport; Tourism and Sport if the cuts to the Luas services and previous cuts to bus services in and around Luas lines will mean that the public service obligation in terms of transport will still be met; and if he will make a statement on the matter. [16848/12]

The operation and provision of bus services is a matter for Dublin Bus in conjunction with the National Transport Authority, NTA. The operation of the Luas service is a matter for the operator, Veolia Transdev, in conjunction with the Railway Procurement Agency and the NTA.

Each year, funding is provided for socially necessary but non-commercial public transport services in Ireland.  In the case of Dublin Bus, the funding of PSO services is governed by a public transport contract with the NTA, which the company entered into in December 2009.  The contents of the contract, such as the level of service to be provided and the basis for maintaining it, may be reviewed at any time by the NTA in consultation with Dublin Bus.

As the Deputy is aware, there have in recent years been revisions to the network and level of services provided by Dublin Bus. Some of these revisions have increased public transport numbers and were aimed at achieving efficiencies and implementing the recommendations of the 2009 Deloitte cost and efficiency review which identified some scope for greater efficiencies in Dublin Bus.  The final range of network adjustments will be completed during 2012.  The objective of the redesign of the bus network was to provide current and future bus customers with a service that will be modern, accessible, integrated, easy to understand, punctual and frequent.

I am supportive of the efforts of Dublin Bus to achieve greater efficiency and effectiveness. Given the losses recorded by it in recent years and having regard to unavoidable constraints on the availability of Exchequer funds for PSO subvention, it is important that Dublin Bus continues to deliver greater efficiency and effectiveness to safeguard the overall sustainability of public transport services in the future.

No PSO subvention is paid for the operation of the Luas services.  However, the level of income generated from passenger and other income has in recent times not met the cost of operation of services.  As a consequence, Veolia Transdev, in consultation with the RPA and NTA, has planned for some service adjustments.  I understand that the main adjustments will be in the off-peak periods on the parts of the network that are not heavily utilised.

The question revolves around the planned cuts to Luas and the spill over impact in this regard on bus services running off the Luas line. I was surprised that some of my other questions on Luas were ruled out of order. I do not understand why the Minister or Department of Transport is not directly responsible for the provision of Luas services and so on given that is the function of that Ministry.

The €1.5 million in cuts will result in seven drivers and four inspectors being taken off the new Luas extensions to Cherrywood, Sandyford, Brides Glen, Saggart and the city. The Minister of State stated the main adjustments will be during off-peak periods. Perhaps he will tell us what will be the level of reduction in services. Currently, off-peak there is a Luas every 15 minutes. I have heard from people working on the Luas that in future off-peak there will be a Luas every half hour. Perhaps the Minister of State will clarify if this is the case.

This is not good. The Government constantly speaks about the need to create the conditions for employment. Cherrywood is a strategic development zone in which there has been significant public investment.

The fact that Luas services will be cut will hardly encourage people to invest in the Cherrywood strategic development zone. Ticket inspectors have told me that it is really ludicrous to cut their jobs because money will be lost as a result. Just 85% of people currently pay their fares on the Luas. The rate of non-payment of approximately 15% will increase if we do not retain the current number of inspectors. The inspectors argue that their jobs are self-financing. I ask the Minister of State to do something about these unnecessary service cuts and stupid job cuts.

The Luas opened in 2004 and operated at a profit without a subvention every year until 2011, when it operated at a deficit of €3.1 million as a result of the economic downturn. That is why changes and cost savings are now required in addition to the fare increases that have been implemented. Deputy Boyd Barrett is well aware that the Luas lines were extended into the Cherrywood and Citywest areas. Unfortunately, the planned residential developments in those areas have not materialised. As a result, the projected passenger numbers have not materialised. The Railway Procurement Agency is working with Veolia on a new service level agreement that will ensure cost savings are made in the future. Obviously, we do not want this service to continue at the same level of loss. As part of that, a number of people will lose their current roles. The company is examining its wider operations to see whether these people can be facilitated in its broader areas of work. The changes in service levels mentioned by the Deputy will relate mainly to off-peak periods - early in the morning and very late at night. There are no plans to provide for half-hour gaps in service as suggested by the Deputy. In some cases, we are talking about increases of four or five minutes. The service levels and the frequencies that are changing will mainly affect those areas where planned extensions took place. We need to be able to deliver a service at a frequency level that continues to work for the majority of passengers.

Any reduction in service is hardly a good signal to send to potential investors in areas like the strategic development zone at Cherrywood, which is supposed to be a hub. Given that it was projected that 5,000 jobs might be created there, it is a very bad signal indeed. The Minister of State did not respond on the question of whether the inspectors are self-financing. According to the inspectors, there is an absolute connection between their presence on Luas services and the revenue that generates, in terms of the fines they issue and their role in encouraging people to pay their fares. Following a change that was made last year, the 63 bus service from Kilternan no longer goes to the city centre. That change was justified on the basis that the presence of the extended Luas line offers an alternative way into the city centre. The retrograde cut in off-peak services will affect the ability of pensioners, the unemployed and others who depend on such services to avail of public transport links.

If the Deputy knows a way of getting another 5,000 people employed in that area, I am sure the operators of the Luas will consider providing more frequent Luas services to the area. Obviously, that would be a huge development. The operators are working in conjunction with the National Transport Authority to ensure the level of service that is provided meets the demand for that service. I believe they are doing that successfully. The changes that are being made at the moment will be customised in accordance with passenger numbers and where it looks like passengers are travelling. I think the frequency level will meet the demand. As part of an integrated approach, the areas mentioned by the Deputy will be served by the Luas working with Dublin Bus.