JOINT COMMITTEE ON TRANSPORT debate -
Wednesday, 16 Nov 2005

Road Network: Presentation.

Chairman

Today we will have a discussion on a report compiled by IBEC entitled, Road Infrastructure Priorities. A copy of the presentation has been circulated to members. On behalf of the joint committee, I welcome Mr. Reg McCabe from IBEC, Mr. Finn Lyden, Mr. Henry McGarvey and Mr. Bill Jones.

I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. We will hear a short presentation by the delegation, which will be followed by a question and answer session.

Mr. Reg McCabe

I thank the Chairman and committee members for their invitation to attend this meeting to discuss our roads report and for giving us the opportunity to elaborate on some of the key points made therein. I will start by introducing my colleagues. Mr. Finn Lyden is managing director of SIAC Contracting, with which the committee will be familiar as it is one of the main contractors involved in delivering the roads programme. Mr. Lyden has a keen interest in the agenda for the meeting. Mr. Henry McGarvey is representing Pramerica Systems which is based in Letterkenny. He is involved primarily in the software industry, supplying back office services to the insurance industry in the United States. Mr. Bill Jones is managing director of Rockall Marine which is based in Killybegs. He is very familiar with the communications problems that can be encountered in outlying regions. He is primarily involved in the offshore shipping business, as well as having an involvement in the area of renewable energy. As members can see, the delegation reflects a broad base of industry experience. I am an official in IBEC.

With 8,000 members, IBEC is the main business organisation in Ireland. Its headquarters are located in Dublin but it also maintains a network of regional offices in counties Donegal, Galway, Limerick, Cork and Waterford. It also operates the Irish Business Bureau in Brussels. A significant aspect of its operation is its long-standing involvement in promoting business co-operation with Northern Ireland, particularly through the medium of the IBEC-CBI joint business council.

Balanced regional development is one of the main pillars of IBEC's policy. In its organisational strategy IBEC supports this ambition through a strong and effective regional presence.

I will now summarise the main points of our presentation which, as the Chairman said, has been circulated to committee members. In our analysis of infrastructure we first examined where Ireland was placed in terms of international benchmarks. The benchmarks for distribution infrastructure which includes roads indicate that Ireland is at the bottom of the scale and only barely ahead of Poland.

In the context of political audiences, the voter interests and priorities should be noted. The Government conducted three items of research, in 2001, 2002 and this year, on public opinion. When people were asked in this year's survey what they wanted the national development plan to address, they prioritised health care and roads. However, roads rank above health care as a voter priority if the preferences are averaged across the surveys. I emphasise that because, as a business organisation, we are often accused of being self-serving when we push the roads agenda. It is quite clear that the general public would support heavy investment in roads infrastructure.

Motorways are the preferred mode in terms of corridors that carry large amounts of traffic and where safety is a consideration. The figures before the committee were taken from the European Commission's transport handbook and show, in kilometres per million of population, the situation in various European countries. It is clear that we are starting from a low point in terms of motorway density but, if the plans revealed by the Government in Transport 21 are implemented, we will have the prospect of meeting the motorway performance of the rest of Europe by 2010 and will be well ahead of the EU 15 average. It is interesting that the UK has a low motorway density per head of population, indicating that it is not a good role model when we measure motorway performance.

While we tend to look to the rest of Europe for benchmarks, it is clear that the United States has double the motorway density of the Continent. Rail freight is often presented as an either/or choice in terms of motorways but that need not be the case. It is argued that by having better railways, fewer motorways are needed and vice versa. However, the US has achieved a modal split whereby 40% of freight is carried by rail, alongside an extensive highway and motorway network.

At present, the roll-out rate being achieved under the national development plan is less than 50 km per year. When we composed our report, we wanted to determine how that figure compares to motorway programmes in some of the main European economies. In the decades when the UK, Germany and France built the backbones of their respective motorway networks, 150 km to 300 km were being rolled out per year. To deliver at these rates, their programmes were ambitious, closely managed and well resourced. If the Government is to fulfil its ambition to build 950 km of motorway between now and the end of 2010, it needs to boost the roll-out rate from the current 50 km per year to between 100 km and 200 km. That represents a major challenge to the system because the performance to date has not been encouraging.

I do not want to be too critical of immediate history but, if the PPP toll road programme is taken as a representative sample of projects, a comparison of the construction deadline included in the NDP review in 2003 and the latest NRA projection reveals substantial slippage in the past two years. For example, as recently as 2003 we were confident that the M50 upgrade would be complete by 2008 but the deadline is now 2010.

Controversy has surrounded the M3, particularly with regard to Tara, and its prospects are uncertain. I will ask Mr. Lyden to comment on that issue, as he is the preferred bidder on the contract.

Mr. Finn Lyden

At present, the NRA awaits a decision of the Supreme Court on Carrickmines which may have implications for legal challenges to the M3. The consortium of which I am a member is the preferred bidder on the project but no progress will be made until these issues are resolved.

Mr. McCabe

An important issue arises in terms of the sometimes lethargic pace of judicial review, although I should not be too critical of the eminences in the courts. The reality is that we have waited almost 12 months for the Supreme Court to hand down a decision on Carrickmines, even though the M50 is now complete. We may discuss that matter later.

I do not want to criticise the NRA or any particular agency with regard to slippage but, as Mr. Lyden is aware, recent experience shows that when contractors went on site under PPPs, projects have been delivered on budget and even ahead of time. The frustration we encounter lies in bringing projects to the starting blocks, a problem which reflects the lack of resources and other planning issues. While I understand that the issues of funding and manpower for the NRA are now being addressed, this should have happened five years ago.

I will not spend much time on tolling because it is a subject unto itself. There is an error in one of the headings in the figures supplied to the committee, which should be "revenue generated for the entire toll network" rather than "revenue generated per toll kilometre", in billions of euro. When the network is rolled out in Ireland, there will be ten to 12 toll schemes generating gross revenue of approximately €300 million between them. However, we know from driving on the Continent that toll levels are sometimes almost astronomical. France, for example, generates tolls in the order of €800 million. While there is a great deal of public controversy over the tolling programme, the revenue that will be generated will be relatively modest.

There is potential to expand the private finance contribution and the PPP schemes for roads. The current contribution is 9% but we feel that €2 billion would be appropriate.

Many people say that tolling points should be rebalanced and, in terms of toll locations, the Government and the NRA may not be entirely consistent with the strategy originally announced, which was to have an equitable spread.

The focus of our report is beyond 2010. We assume that the motorway interurbans and the radial motorways out of Dublin will be completed. As an organisation with a strong regional basis, IBEC wants to move the focus to approximately 1,500 km of primary roads that are not radials out of Dublin but cross-linking corridors. This focus would be consistent with the national spatial strategy. To achieve that we need to maintain spending broadly at today's levels for another decade and to focus more on traffic management and incident management.

The next slide elaborates on the cross-linking corridors we hope to prioritise. Some of these run east to west, some north to south. My colleagues from the north-west region have concerns on the status of the N2 linking to the A5 and the N3 as critical links into the north-west region.

Mr. Henry McGarvey

As a representative of IBEC north west and the northern part of County Donegal, I am often asked what must be done to develop County Donegal. One of the priorities for the business community is the upgrading of the road to Dublin and the Letterkenny to Derry access. Letterkenny has been identified in the national spatial strategy as a potential future city and Derry is the fourth largest city on the island. Bypasses around Carrickmacross and forthcoming bypasses around Castleblaney and Monaghan are welcome improvements. As these roads run only to the Border, we seek an all-Ireland approach to help develop the road network through Northern Ireland, which is essential to improve access to Donegal. We seek to designate the Derry to Dublin route as the fifth major national corridor. Mr. Bill Jones will speak on the N3.

Mr. Bill Jones

The north west, comprising Donegal, Leitrim and Sligo, is accessed via four routes, namely, the road from Belfast via Derry, the N2 which continues through Strabane to Letterkenny, the N3 towards south Donegal and the N4 through Sligo. Three of those routes go through Northern Ireland and only one remains in the Republic. The only route into Donegal from the Republic is across the bridge in Ballyshannon. As Mr. McGarvey said, there has been welcome upgrading of roads north from Dublin but the Northern Ireland Government has no plan to build on these roads. The roads grind to a halt at the Border. There are all-Ireland energy and communications policies and the roads infrastructure must also come under an all-Ireland policy.

Some €50 million was recently spent on developing the port of Killybegs. It is the deepest water port in Ireland but has no roads coming from it. We have built a fine piece of infrastructure but have not linked it to anything. We must examine the regional roads and the cross-linking corridors and get the Northern Ireland authorities to co-operate.

Mr. McCabe

We are now moving to Transport 21. IBEC welcomes the plan, which provides a blueprint for roads and other elements in transport, particularly for Dublin.

This slide shows the positive elements of Transport 21. There is a commitment to completing the motorway interurbans, MIUs, by the end of 2010. We welcome the commitment to completing the N9 from Kilcullen to Waterford and the inclusion of the regional cross-links. The concept of the western arc is in line with our thinking.

Details are yet to emerge of the additional PPP elements but a figure of approximately €2 billion has been mentioned. The private sector is interested in investing. There is strong competition in the road sector, there is deal flow on PPPs and we are happy that further projects will be brought forward.

Road links in Northern Ireland are a priority and we would appreciate support from the political system in putting pressure on the Northern Ireland authorities. The sea ports are vital trade and tourism gateways and must be integrated into the transport infrastructure. It is good that responsibility for these is to be quickly transferred from the Department of Communications, Marine and Natural Resources to the Department of Transport.

This slide shows our reservations about Transport 21. Project timelines in Transport 21 are unclear, particularly for public transport. There is scope for Department of Finance roll-back. We are concerned that responsibility for delivery is spread over a number of units of the Department of Transport. We welcome the plan to establish the Dublin transport authority but as some media commentators have said, that element has been on and off for a couple of decades. We hope this time the Government is serious and this agency will add value but it remains unclear. We are disappointed that the eastern bypass has not been confirmed but is subject to further studies.

The reality is that Ireland is an island off an island. Due to the fact that we are dependent on the UK's transport network to access our vital continental markets, there are issues that must be advanced in Northern Ireland and in the UK mainland. Due to UK devolution we can no longer discuss these problems with a central government in London. Devolution in the UK requires us to develop an agenda with the Executives in Scotland, Wales, England and Northern Ireland. In terms of regional links the picture has become more complicated. I thank the Chairman for his patience and for allowing us to present some of the issues in our report.

Chairman

The question of access to certain ports in the UK and the roads leading to and from them has already been discussed by the British-Irish Interparliamentary Body. It is already on the political agenda vis-à-vis the Scottish Parliament and the Welsh Assembly because they have the same problem.

Can Mr. McCabe point out programmes where there has been major slippage? Some programmes deserve credit for being ahead of time, particularly the public-private partnership projects such as the M4, which will open some eight or nine months ahead of schedule, on 12 December, making it easier to get home.

Mr. Lyden

The toll will be €2.50.

Chairman

I do not mind that. If people do not think their time is worth the toll charge they are on the minimum wage. IBEC and other business bodies always tell us that road access is important for bringing about dispersal from the point of view of industrial development. Certain areas, including my own, have been seen as peripheral because of the road infrastructure, despite the fact that they are only a couple of hours from Dublin.

Mr. McCabe mentioned many cross-linked corridors but not the Dundalk-Sligo corridor, also known as the east-west corridor. It is critical because it affects not only the Border counties but Northern Ireland, which has seen little or no investment in the past 25 years. There are political reasons for that which are outside our control. The road from the Border at Blacklion to Ballygawley and on to Belfast has had virtually no investment. Similarly the road from Derry to Dublin via Omagh has not improved at all. IBEC should, with its equivalent in Northern Ireland, lobby for these roads to be viewed on a national rather than a local basis. To that end the SDLP is to make a submission to the committee next week on the possibility for North-South transport infrastructure, including roads. That may be of interest to members in Northern Ireland.

The new programme for roads infrastructure includes routes from Letterkenny to Belfast, Sligo to Belfast, Tralee to Rosslare, Cork to Letterkenny and Dundalk to Rosslare and proposes a full circular route. This is necessary because without link routes between each of them we will end up with the same problems as heretofore with heavy goods vehicles on substandard secondary roads. IBEC might bite the bullet and recommend that certain roads be given priority.

Mr. McCabe

Some take the view that the M50 corridor serves Dublin but it is a key national corridor on the basis of linkage to the airport and to Dublin Port and the large amount of logistics and distribution retailing around it. It is one example of slippage. The upgrade should be a key national priority. Consultants working on the full-scale review of the NDP in 2003 authoritatively stated it would be completed in 2008, but now the NRA states it will be 2010. Mr. Lyden is involved in that project.

Mr. Lyden

It is important to distinguish slippage during the planning process from slippage during construction. It is not in the interests of a contractor for a project to be delayed. The contractor makes money by bringing it in on time. If a job goes on longer he must pay overheads. If a project is interfered with in any way, such as happened in Carrickmines, it will be delayed dramatically and increase costs. There has been much publicity on cost overruns but slippage also occurs before the contractor comes near a project. We need a way to tie our national processes together in order that, once a decision is made to proceed with a route and the Minister signs the order, that stands at the pinnacle of the legal hierarchy and nothing can interfere with its progress.

Chairman

Does Mr. Lyden say that the critical infrastructure Bill will ensure such orders are carried out in order that major projects will be delivered more promptly, and the courts cannot be used as a blocking mechanism?

Mr. Lyden

I assume such provisions will be in the critical infrastructure Bill. In other countries, once a Minister makes an order it is supreme and no other legislation, from whatever source, can interfere with that decision.

Chairman

We discovered that when we investigated the metro in Madrid. Once the order was signed nobody could stop Professor Melis from going anywhere he wanted and the net savings were phenomenal.

Mr. Lyden

Precisely. The other area in which they have flexibility is in not being tied to legislation as precisely as we seem to be. We comply with the same European legislation on EIS schemes etc. but seem to have restrictive interpretations of it.

Mr. McCabe

The Chairman mentioned the Donegal-Sligo corridor.

Chairman

No, the Dundalk-Sligo corridor. Donegal-Sligo is actually a good road, or will be once Bundoran is bypassed.

Mr. McCabe

Perhaps the Chairman has exposed a chink in our armour with mention of the Dundalk-Sligo road. I do not recall that route coming up in our internal consultations.

Chairman

It is the main corridor for exports from the west of Ireland destined for Belfast and Larne, and the road infrastructure cannot take it.

Mr. McCabe

I will note that point. We are all happy to hear of the SDLP's visit here next week and I will try to attend. We need better dialogue at that level in order to push jointly on all the priorities, particularly in the North.

Chairman

If IBEC wants to make a submission it should do so to the British-Irish Interparliamentary Body.

Deputy O. Mitchell

I thank the delegates for their presentations. We did not learn anything we did not already know. The main message seems to be to get on with it. The survey by Drury Communications found that more people were interested in roads than public transport but it is misleading because roads are a national issue, whereas public transport is only an urban issue. Anyone who knows me realises that I am totally committed to the roads programme and the sooner we complete inter-urban routes, the better. I support the idea of an inter-urban route to Derry because the existing route is unsatisfactory and it can be torturous to get to that city. I agree with the cross-links that have been mentioned.

On the public transport issue, there are no more road solutions for Dublin, for example. There was a time when I believed the eastern bypass was a critical factor but I am no longer convinced. Perhaps when the port tunnel opens it will change my mind. We are spending over €1 billion on the port tunnel and we are not even sure it will provide a solution in respect of the distribution of goods, as opposed to people. It is generating more demand for expenditure on roads at both ends, although such spending is required.

Perhaps we should not close our minds to the idea of rail freight. The United States has been mentioned in this regard. That country is a completely different scenario because rail transport can be justified over long distances. There would be less handling than in a small country such as ours. At present, Iarnród Éireann appears to be disposing of all its rolling stock and capacity. Pocket wagons bought relatively recently are being sold off, apparently for scrap, because nobody seems to want them. This is being done with indecent haste because the country does not want to be in that business prior to the liberalisation of the market, which will allow other companies to enter. The business does not appear profitable at present but fuel costs are rising and there will be long-term consequences associated with the Kyoto agreement. With the impact of the growing number of heavy goods vehicles on the roads, perhaps there is a case to be made for rail freight. We should not close the door on it.

It has been mentioned that there is slippage in the delivery of infrastructure. There have been significant delays in the delivery of many projects. The solution is to have projects in the pipeline for the stage of going to tender. The NRA should be resourced accordingly and the witness has stated that this is happening. On the planning side, little has happened. There were some changes regarding judicial review but these have not had the envisaged impact. If this was easy to do we would have passed the relevant legislation long ago. There is clearly a balance to be struck between the rights of individuals, the common good and how far we can go in either direction.

One critical factor that is required is an infrastructure agency which would drive projects. If issues were taken to court, there would be a body that could ensure matters are not left because nobody is willing to take them on. It often occurs that a difficult issue is left behind when simple matters are resolved.

I agree with the all-Ireland transport policy. The island is far too small for North and South to ignore each another. I heard Belfast City Airport seeking customers from the State yesterday and it should be commended for this. We need them as much as they need us. The cross-links mentioned earlier are very important. Everything seems to radiate in and out of Dublin. As a Deputy from the city, the best thing that could be done for Dublin is to promote a strong regional policy that would not draw everything to the urban area. The strengthening of gateways and linking of hubs is critical. The inter-urban routes should concurrently be joined.

The timescales for some of these routes is unclear. For example, the Atlantic corridor — a dramatic name, which makes it sound as if it will come in a large wave from Donegal — has neither a start nor finish date in the transport plan. Other projects at least had a finish date. It is worrying that this particular project does not have the priority that should be accorded. Much attention has been drawn to projects which have begun but what has been started must finish.

With regard to road solutions in Dublin and whether the port tunnel will solve the problem of heavy goods traffic coming from the port, we are now not only belatedly planning roads and bridges at both ends as traffic is coming on stream, but we are talking of moving the port. There is a need to take freight into account. If goods cannot be distributed we are economically dead. Most of what comes through Dublin Port has a destination in the city area anyway but how the goods are distributed will be a critical issue.

Mr. McCabe

To take up the Deputy's final point, we have recognised for a long time that much urban infrastructure has been neglected and we have not done ourselves any favours in that regard. Looking across Europe in the post-war period, there has been major investment in urban centres, including elements of public transport. In cities we all know, such as Brussels, we have seen examples of this. From a commuter's and user's point of view, these places seem to work better because of urban highways or motorways. These places have had investment in these types of infrastructure.

There was a comment relating to an earlier report published on port access infrastructure that no improvements were made in Dublin after the arrival of rail in the 19th century until the M50 was built. That was the gap between improvements. I concluded that this statement was essentially true. Other cities in the UK and around Europe have built roads. Although roads are not the ultimate solution, they are important in a port city with the biggest port in the country at its heart. This is why the eastern bypass is being pushed. In comparison with other cities, Dublin does not have a good balance in terms of available infrastructure.

This is not to downplay public transport because we are excited about the prospect of additional Luas and metro lines in Dublin. I am tempted to discuss the port tunnel.

Deputy O. Mitchell

It is not open yet and will not be for some time.

Mr. McCabe

Perhaps we will leave the issue for another day.

We have concerns about the prospect of severe congestion. We regularly experience, on coming from the airport and making a right on to the M50, the road being blocked right up to the Turnapin interchange. This is the situation at present but what will it be like when approximately 7,000 trucks per day are on the road going to and from the port tunnel? Although this is a concern, I do not wish to be negative. Over the longer term, the upgrade of the M50 will address many of these problems. In the interim, the reality is that much pain will be suffered.

Deputy Shortall

I thank the delegation for its presentation. I wish to ask about the opinion poll carried out in 2001-02 in which 33% indicated that roads should be a priority. Is there any more recent information, given that the situation has changed dramatically in recent years with the increase in population, an increase in congestion and an increase in commuting times? I suspect the view of the public is that there is a need for greater investment in public transport. I imagine the levels have changed somewhat since 2001.

The delegation's chart on motorway density in the EU makes the point very starkly that if the Government sticks to its schedule for the roads programme, where Ireland was at the bottom of the pile in 2003, and it goes ahead as planned Ireland will be at the top of the pile by 2010. One is starting from the position where the view is that motorways are a good thing so that we should aim for the top.

The next chart, which shows the US has an even higher motorway density than Ireland hopes to have, shows there is a higher target towards which we should aim. To what extent is it socially or economically desirable that we should aim to be top of the EU in terms of motorway density? The delegation appears to imply that Ireland should head towards the US standard.

Public opinion and that of some elements in the business community has changed somewhat in recent years because it is accepted there are major problems with congestion, particularly in the greater Dublin area and in Dublin city, and to an increasing extent in the other cities also. Frequently we hear that traffic congestion in the city is costing business hundred of millions of euro. Does the delegation have a current estimate on that? Is it not the case that the major problem of congestion is due to so many commuters driving around because there is not adequate public transport?

I question the suggestion that it is desirable that we get to the top of the EU league since that does not come without a price. The price of investing to that extent in motorways is that there is less to spend on public transport. I am concerned at a lack of logic somewhere in the argument that we should seek to have all these extra motorways while not accepting that we lose out on public transport. At the end of the day is it not accepted that a road solution will not deal with the problem of congestion, that the approach has to be more imaginative? I am surprised the delegation does not accept that argument.

The delegation referred to the critical infrastructure Bill. We would all accept there are unacceptable delays in the entire planning process from start to finish in major infrastructural projects. It is difficult to comprehend why the design phase of any major project takes so long. I agree with what was said about the skills requirement in the NRA and perhaps those skills could be shared with the RPA. We are starting from a low base here in so far as we are short of the skills to think in terms of major projects. There are long delays at the design stage. Following public consultation there are long delays in making any amendments to the design. There is also the planning period, which could be shortened to some extent. After that there are endless delays involving legal challenges.

My understanding initially of the critical infrastructure Bill was that it would put some coherence into the process, avoiding those two, three and four year delays. What the Minister appears to be talking about is truncating the actual planning process in respect of local authorities and An Bord Pléanála. That is not what most people had in mind in the beginning, because that is not where the major delays are. I would be concerned that the Minister for the Environment, Heritage and Local Government, Deputy Roche, is talking about a new unit within An Bord Pléanála and will not deal with the delays in the design process or speeding up the legal challenges. Has the delegation had any discussions with representatives of the Government in that regard? From what I understand of the Minister's proposal, it will not improve the position as he has got the wrong target. I would like to hear the opinions of the delegation on that issue.

Mr. McCabe

I will ask my colleague, Mr. Lyden, to comment on the critical infrastructure Bill. I shall deal quickly with the other queries.

Perhaps I did not make it clear that the first slide, showing the results of the opinion poll, was this year's survey. It showed the aspirations of the general public on what they consider should be in the national development plan in 2005 — 42% prioritised health care, while 33% prioritised roads. All I did in the next chart was take the three surveys and amalgamate the results. That is representative of public opinion throughout the entire period of the national development plan. One could say I am cheating but it is just a different way of presenting the data. In the current year voter priorities are very much on the health care issue which does not come as a great surprise. It is important to note that roads are still high on the list of priorities.

I am not being negative about public transport. Deputy Mitchell was correct to point out that it is probably only a sector of the electorate that would be concerned about public transport. From a national perspective, in terms of priorities, public transport is low on the list of priorities as indicated by the figures.

On the question of motorway densities, there are a couple of issues. We are taking a snapshot but we were not able to show that Spain, Portugal, Greece and a number of accession countries have major motorway construction programmes under way at present. We have taken all other things as being equal. By 2010 the position in Spain and so on will have changed but we have left that as static. I agree with the Deputy that Ireland will probably be close to the EU average at the end of the construction period.

It is important to emphasise that we do not see it as a case of rail freight versus road transport or road infrastructure. We think there is a valid place for both. It is interesting that the rail freight system is being liberalised. It is not a policy that has attracted unanimous support across the community. Here I refer to the trade unions but as they are not present I will not dwell on that issue. However, there is a process in Europe of liberalisation of both public transport and rail freight. I am open to correction on this but I think the rail freight implementation target is 2007. In fact, we have had an expression of interest from another operator to come in and provide rail freight services in competition with Irish Rail. Hopefully, with competition there will be some improvement in the performance. That would be very desirable. All is not lost on rail freight. It will be interesting to see how this market evolves during the next few years.

Perhaps Mr. Lyden could comment on the critical infrastructure Bill.

Deputy Shortall

I asked about motorways as opposed to public transport in terms of dealing with the congestion and if Mr. McCabe had an estimate of what traffic congestion is costing the business community. How can we deal with congestion in the Dublin area as part of the roads solution and do we not need to cater for commuters to ease the congestion for the business community, as well as for many other reasons?

Mr. McCabe

I apologise to the Deputy. I did speak off the point. Can we come back to the Deputy on that? I do not have a figure off the top of my head but we will communicate it to the Deputy. We do not have a figure on the cost of congestion.

Deputy Shortall

Can Mr. McCabe comment on the principle and the approach to tackling the problem of congestion?

Mr. McCabe

As I said earlier, it is a twin-track approach. What I have been trying to emphasise is that cities throughout Europe which are comparable in scale and have a status similar to Dublin have investment in both. Brussels, a capital that is roughly the same size as Dublin, would be a case in point. The rue de la Loi is a six-lane infrastructure leading into the heart of the city. That is replicated in other cities, and it has a tram and a metro system.

I understand the figure in Dublin for the public transport mode is around 20%; we are at about 8% nationally. In places like London and elsewhere the public transport share is between 40% and 60%, even higher in other places. We have the potential, therefore, to reach those types of figures but I would not say that is an argument for not investing in roads. I accept the Deputy may see it differently but from our perspective as a business organisation we would——

Deputy Shortall

I am asking Mr. McCabe——

Chairman

Deputy Shortall, please allow Mr. McCabe to answer.

Mr. McCabe

I do not wish to repeat what I said earlier but for decades there has been a colossal underspend on infrastructure in Dublin and in the other cities and towns throughout the country. It is the deficit that must be addressed and that is the reason the investment requirement is enormous across the different modes.

Deputy Shortall

May I ask one more question?

Chairman

Please let Deputy Glennon come in. He has been waiting ten or 15 minutes.

Deputy Glennon

Thank you, Chairman. I join my colleagues in welcoming Mr. McCabe and his colleagues. I want to ask a number of questions and make some observations also. Regarding the motorway density issue, I note Mr. McCabe's response to Deputy Shortall concerning the 2010 position and the difficulty he faced in getting information on how we will stand in 2010 in comparison to our European colleagues. I am not someone who believes the European averages are the panacea for all our ills. How does Mr. McCabe believe we will be fixed in 2010 in terms of our needs, regardless of European averages? Will we have an adequate system? If we will not, what areas does he believe deserve attention?

Regarding rail freight and the US figure of 40%, I do not believe we should compare this country with the US in terms of suitability for rail freight. I am interested in the comparative Irish figure for rail freight. Is it less or more than one tenth?

Mr. McCabe

It would be less than 10% and——

Deputy Glennon

Less than one tenth of the US figure of 40%? Is it around 4% or 5%?

Mr. McCabe

It would be of the order of 5% currently.

Deputy Glennon

In his initial contribution Mr. McCabe mentioned in passing traffic and incident management issues. Will he elaborate briefly on those two areas?

Every member would agree with the aspiration to an all-island roads authority. Only an ostrich with its head buried in the sand for several generations would argue against that. I was struck by Mr. Jones's comment on the massive investment in transport infrastructure in Killybegs but we did not join the dots, so to speak, in that regard. In the Transport 21 road plan, Larne is somewhat isolated. I accept fully that it is not within our parameters, but equally Rosslare appears to have slipped away slightly. There was a grand plan for an E1 motorway linking Larne and Rosslare as part of an overall European scheme. I would like to hear Mr. McCabe's views on the necessity for that. To go back to the position in 2010, does he see us having a viable system?

Unfortunately, Deputy Olivia Mitchell is not with us but I was interested to hear her talking about Dublin Port. Many people in the East Wall would be interested to hear that. My understanding is that a new port is being developed at Bremore, just off the M1, which will be additional to the existing port's infrastructure. How does Mr. McCabe see that fitting into the overall roads position in 2010?

Mr. McCabe

Leaving aside the European benchmark and asking if it will be fit for purpose in 2010, I believe the short answer is "Yes". We are operating to a national spatial strategy blueprint and I believe we will see a broad roads network that will be consistent with the overall spatial planning for the country. We were talking earlier about the timing of the implementation of Transport 21 and the cross-linking elements the Chairman referred to as being also critically important so that we do not get too much load on the radial corridors, and they are coming sequentially after that. We cannot do everything at once, however. In terms of the elements, the radials will deliver in terms of our own vision of what is required with regard to capacity. It is entirely correct that we move forward to the linking routes but I hope it will not take as long as ten years. The sooner they can be put in place, the better.

On the traffic and incident management question, we have been disturbed at the length of time it has taken the authorities to intervene and deal with accidents and incidents on some of the roads. There was a particular incident on the M50 a few months ago, which happened on a Sunday, and one side of the M50 was closed for eight to ten hours. It was a fatal accident and we accept the Garda had its procedures to go through, including the forensics and so on, but I doubt if half of the M1 in other countries would be closed for eight or ten hours because of a single traffic accident. We need to sharpen our pencils considerably on that issue. It is not just a question of investment; it is getting value from the investment. When these motorways are put in place the unfortunate reality is that from time to time there will be accidents and they must be dealt with.

Mr. Lyden

On the point about joining the dots, which is very important, there are approximately 50 bodies responsible for promoting infrastructure in the State, including all the county councils, the ESB and so on, but they do not always work together. When a truck drives off a ship in Dublin Port, it travels through Dublin to, perhaps, a warehouse off the M50 and unloads its cargo which is transferred to other trucks which travel back into town. The port needs considerable space to facilitate the break bulk function. If there is a plan to build another port, all the infrastructural links need to be put in place at the same time. That requires a co-ordinated planning approach, which may not work well because of the multiple agencies involved. The committee might examine the co-ordination aspect.

Mr. McCabe

Deputy Glennon referred to Rosslare Port and the Bremore facility. I will briefly deal with Bremore and ask my colleague to comment on Rosslare Port. What I have read about Bremore does not suggest it can be an alternative to Dublin Port. My understanding is that there is no question of Bremore having the capacity to be an alternative to Dublin Port. There is currently a plan in respect of it. The promoters of the project will have to jump through the hoops in terms of the planning and environmental processes and so forth. There is a considerable amount of infill required to develop that facility. It is an open question at this stage as to whether it will get the necessary approvals. The project is at an early stage but there are some interesting aspects to it.

Irrespective of whether the facility is in Bremore or Dublin, those transporting freight will be trying to access the M50. I do not believe such a facility would play a dramatic role in reducing traffic, although that remains to be seen.

Mr. Jones might comment on the position concerning Rosslare.

Mr. Jones

To the best of my knowledge, and members should not take what I say on this as being gospel, there are a number of issues concerning the Rosslare-Larne link. One issue that must be addressed is the ownership of Rosslare Harbour. It is currently owned by Iarnród Éireann. Another issue about making Rosslare a major port for import/export business is the provision of an adequate road infrastructure to Rosslare Port. The N11 needs to be extended all the way to the port. Until that work is completed, Rosslare is out on a limb.

Concerning the Larne-Rosslare link, I have heard that unless the Eastern Bypass goes ahead we are wasting our time because freight traffic will hit the M50 irrespective of which direction it is travelling. Rosslare has major potential for handling European imports and exports as it is the nearest port to the Continent, but such development would require major investment in our national primary routes. There is no motorway other than the one going north, which is a proposal. Major investment is required in the roads radiating out of Rosslare.

To expand on Deputy Shortall's point, apart from the transport of people which is the public transport aspect, from a business perspective we must move goods. Speaking from my experience of running a haulage company and having regard to the high volume of traffic on our roads, the only time to move goods economically, especially in the food sector, is at night. Much distribution of goods takes place at night. People do not see much of the transport of freight as it is takes place at night. We need motorways to transport freight from A to B and then there is the regional distribution aspect. Freight is moved from warehouse to warehouse and it needs to be moved as fast and as cheaply as possible to and from the import or export destination.

Nearly all our imports and exports pass through the eastern ports. I touched on Killybegs. It has huge potential as a deep water port on the west coast, the next continent being North America. If a truck driver leaves Killybegs Port and heads to the Kilmore Hotel in Cavan, which is more than half way between Killybegs and Dublin, and a truck driver leaves Dublin Port and heads for the same spot in Cavan — we did this as a trial — the truck driver travelling from Killybegs will reach that hotel one hour and ten minutes before the truck driver travelling from Dublin Port. That delay is due to congestion. A great deal of money is being lost by the business community in the haulage industry through inefficiency.

Senator Dooley

I welcome the delegation. I found the presentation interesting. Much of what I intended to cover has been addressed. I would like to hear Mr. Lyden's view on the issue of fixed price contracts. He addressed some of the difficulties experienced in terms of the development of infrastructure, particularly road infrastructure, and he pointed out some of the reasons for delays in delivery. In that context, he might address fixed price contracts. Does he consider they will help to overcome some of the delays experienced?

Mr. McCabe's presentation focused on people involved in industry and business. While tourism does not fall within the defined parameters of IBEC's remit, he might address it as it is a considerable industry, particularly along the west coast. The proposed Atlantic corridor will be of great significance to the retention and continued development of tourism in that region. Allied to that is an effort to build infrastructure to counterbalance development on the east coast. Mr. McCabe might elaborate on that issue.

Deputy T. Dempsey

I am sure Mr. McCabe is aware of the importance of the transport industry to Wexford which I represent. Does IBEC hold a position on the non-inclusion of Rosslare in the main Transport 21 web? Furthermore, does it hold a position on the need to develop proper access infrastructure to Rosslare as our euro port?

Mr. McCabe

A question was addressed to Mr. Lyden and he might deal with it first.

Mr. Lyden

Senator Dooley raised the issue of fixed price contracts and the proposal to introduce more fixed price contracts in the construction industry. There is considerable misinformation about this issue. A contractor tenders for a job on the basis of a specification that has been put out to tender. That is done on a competitive basis. It often happens on a job that what is specified is not what ends up being built. It transpires that the original specification has to be changed for various reasons, as a result of which the final price of the contract is different from the initial price. Contractors have no difficulty, in principle, in taking additional risk but they will look for a return on that additional risk. The experience elsewhere is that in allocating risk between the client and the contractor, a decision should be made on who is in the best position to manage that risk. A risk register can be compiled and the parties then go down through the various risks.

A typical problem is unexpected ground conditions. When a project has been put out to tender and every contractor is examining it, usually a pre-tender evaluation of the ground conditions is carried out and each contractor will price the project on that basis. If rock is found where no rock was indicated, the contractors will look for more money. The question is who is in the best position to manage that risk. Is it the client or the contractor? Contractors can take that risk but they will charge more for doing that. The difficulty, in general, is that the more risk that is transferred to the contracting sector, the more we polarise towards larger contractors and eliminate smaller contractors from the supply chain because they are not capable of taking these levels of risk. A totally fixed price contract is almost impossible unless a contractor has a fairly high margin to do that work.

In general, the PPPs are fixed price contracts because a bank is tied in with those projects and it will not let the project proceed unless the contractual arrangements are in place. Contractors factor in considerable risk into those prices that would not normally be priced in. If one were to carry out an evaluation, one would find that such fixed price contracts, on average, end up being more expensive. That still does not deal with the embarrassing issue for the contracting authority when the final price ends up significantly higher than the tender price. In the majority of cases the reason is that works were carried out during the course of the contract at the request of the contracting authority that were not envisaged when the project went to tender. I am not sure if I have made myself clear.

Senator Dooley

I think Mr. Lyden has answered clearly. Our perception is that in a competitive environment between contractors — I certainly do not speak from experience and Mr. Lyden will know much more about it than we will — a bidder may not understate the expected cost but may expect a greater level of extras. While this of course creates an embarrassment for the contracting authority, it also requires the contractor to spend more time on the evaluation and on having a clearer picture. Obviously that is of benefit to the contracting authorities in planning and managing their budgets in line with other projects. Generally it is welcome. I am interested to hear his point that we must look out for anything it does within the contractor sector.

Mr. Lyden

That would be a serious problem. There are other forms of contract which are used and are being used on a trial basis, like target costs contracting which gives an incentive to the contractor to save costs. One uses the contractor's expertise in the course of the contract and the client achieves savings as a result.

A set of draft contracts has been issued under the fixed price contracting concept. As far as we know, they are unprecedented anywhere. In this regard, I am speaking more for my colleagues in the construction industry than for those in IBEC. If they were introduced, in our view it would be a serious mistake because they will be tested eventually only through litigation. At a point like this, when there are serious projects to be delivered, it is quite risky to try to change the contractual matrix under which these are tendered.

There are alternatives. Many contractual forms are recognised internationally such as FIDIC, a contract system used throughout the Middle East and the Far East where multinational contracting companies are involved. That is a perfectly adequate suite of contracts that we could use here. It seems strange to be reinventing the wheel in this regard. If there is a wish to transfer much more risk to the contracting sector, it will eliminate many of the smaller contractors and that would be serious.

Chairman

Mr. Lyden's SIAC has been involved on the M4.

Mr. Lyden

Yes.

Chairman

SIAC went in on a fixed price contract on that. Did SIAC add a percentage or had it done enough ground surveys to show how much rock the company would be able to recycle and how much of X, Y or Z the company would be able to use?

Mr. Lyden

We had to take those risks up-front. That is the only way one can do it. That is fine. We have an international partner on that project. The cost of that road will probably be more expensive than if it had been done——

Chairman

How much faster has it been delivered than if it were done under the old-style contract?

Mr. Lyden

It will be opened on 12 December, ten months early. That is because when we are faced with a problem, we must get on with it and sort it. We are not waiting for an instruction from the client.

Chairman

This is what I am getting at. If one departs from a fixed price contract, one ends up putting in months of negotiation on whether there was X tonnes of bog or rock to be removed. Is it cheaper in the long term for the State to go for the fixed price contract knowing exactly what will happen rather than end up in this other position involving extras and supplementary claims which take years to settle? There have been cases where contractors have been put out of business because nobody could sit down and negotiate the extras or the PC sums. Is it better for the public to have the PC sums or to know with a fixed price exactly what will be spent before the company starts?

Mr. Lyden

It is really a matter of where one wants to share this risk. There is no reason that one cannot have a contingency sum. It is strange that in the way many of the contractual overruns have been reported, the comparison made has been between the tender price and the final outturn paid to the contractor. If one were an international company building a major plant in Ireland, for instance, one would have the contract amounts with particular contractors doing the job but one would also have contingency amounts. Such contingency amounts are budgeted amounts. One does not know what they will be for but one knows they will be spent by the end of the contract. One manages those contingency amounts. The budget of a building manager in a multinational company, for instance, would be the sum of the contracts that are left plus the contingency amounts. That is what a building manager measures his or her performance against at the end of the day, whereas in much of the reporting of the public sector contract overruns there is no contingency spoken of and that seems unrealistic.

Chairman

Does Mr. Lyden agree that the practice for many years in the construction industry was for companies to ensure they got the tender and then to pick up on the extras? That has always been the way, even with the smallest contract. If it was only to build a house, one would tender a price and then state that a wall or something else was different and then the PC sums double the price of the project. This is what I am trying to find out. Would SIAC have been prepared to take on the M4 without a partner?

Mr. Lyden

No. It was far too big a project for us on our own.

Chairman

Without its Spanish co-companies and others, SIAC would not have been able to do it. I do not wish to sound like I am putting Mr. Lyden under pressure. He might not want to answer for commercial reasons. If SIAC had gone in to do that, the company would be doing it in 10 km or 15 km stages.

Mr. Lyden

Yes.

Chairman

It would have taken three times as long to do. Does Mr. Lyden agree there is a major saving in that it will be completed ten months ahead of schedule and there will be no extras to pay? It is agreed that if the contractor makes money, he will probably come back for another contract and the State may win on that subsequent contract. What we are trying to get across is that in doing it the old fashioned way rather than by public private partnership, one is not able to price the contract legitimately in accordance with the outturn cost because the tender price increases indeterminably due to a number of PC sums.

Mr. Lyden

There is a misconception that contractors have been paid for items which are not costs. That would be entirely wrong.

Chairman

I am not disputing that they have been paid for costs but what I am saying is that they have tendered for sums which were far below legitimate contract prices and that they then had to pick it up by means of the PC sums. I am not saying that it was illegal. I am just saying that there has been a system where, for instance, the contractor got a ground report from a local authority and, because the hole might not have been bored in the right place, might find rock 2 ft away from where the original bore hole was. In such a case, there would be a hullabaloo and all work would be held up until there was a decision on the matter. Consultants from everywhere would arrive and every one of those guys would have to be paid.

Would Mr. Lyden agree that overall the public is probably getting better value for money and projects delivered more quickly by the public private partnerships? We all are speaking about speedy delivery because this is about infrastructure which needs to be put in place.

Mr. Lyden

No doubt they are getting faster delivery because more control has passed to the contractor. Whether it will be cheaper is another matter on which I would not like to comment.

Chairman

Mr. McCabe might answer Deputy Dempsey's question.

Mr. McCabe

There was a question about tourism which I wish to address briefly. The key issue is dispersing the tourist traffic coming in through gateways. We obviously are trying to avoid a situation where there is too much focus on Dublin as the gateway, particularly from the airlines, etc. Gateways like Shannon and Cork are playing a bigger role but will play an even greater role in the future. I suppose the reality is that this network will deliver added value in facilitating tourism traffic getting to other places. One way of putting it is that it will enhance the tourism experience. Tourists certainly will not be frustrated by poor standard roads which reflect badly on the country.

The Deputy asked about the lack of focus on Rosslare. In terms of investment, one could argue that there is a lack of focus on all the ports in Transport 21 because we are in a process of transition. The ports currently come under the control of the Department of Communications, Marine and Natural Resources. The policy is for the ports to substantially fund their own investment requirements. The Government does not see a major role for itself as an investor in port infrastructure. That is my understanding of the position in respect of Rosslare, Dublin and all the ports. I do not think it is a question of a particular port not being included. IBEC recognises that Rosslare is the gateway in terms of direct access to the Continent for ro-ro traffic, which is important. Under EU policy, there is a lot of focus on motorways of the sea. Many discussions are taking place between Rosslare and other ports on the Continent in terms of utilising the TENs framework and the motorways of the sea as a way of building better services and enhancing services generally direct to the Continent without going through the UK. From that perspective, one could argue that Rosslare has a good future.

Chairman

Would IBEC like to see a policy in place with regard to X number of ports being developed and funded, rather than, as is currently the case, the provision of funding in a piecemeal fashion?

Mr. McCabe

Yes.

Chairman

Killybegs is a case in point. There has been State investment in the port but to get people to use it will not be easy.

Mr. McCabe

The reality is that some of the major ports are outside the jurisdiction. The UK recently announced major investment for Warrenpoint. Some people are cynical as to whether it is an investment or aid. There is a question regarding state aids, unfair competition and so on. Perhaps the mistake we are making is in examining capacity in the ports rather than taking sufficient account of the potential in places like Belfast. I do not know if Mr. Jones would agree.

Mr. Jones

Killybegs is between a rock and a hard place because it is not a commercial port. The port comes under the fisheries division of the Department of Communications, Marine and Natural Resources. It has huge commercial potential. While this must be built on, we must take cognisance of the fact that it is still primarily a fishing port. Whether it will change is up to the Government. It has deeper water than Dublin Port. All the equipment for Tynagh Mines, which is a long way from Killybegs, could not be landed at Galway. The vessel berthed at Killybegs and offloaded its cargo, which was shuttled to Galway. The port has potential to deal with large loads. The majority of wind turbines coming into the country are being brought in through Killybegs. We have the infrastructure but we do not have the roads. We took turbines in through Larne but a city creates problems.

When we talk about an all-island body, to try to move an abnormal load in Ireland, one must deal with each county council. IBEC and the Road Hauliers Association advocate a central all-island body to deal with this area because hiring transport involves huge costs.

Chairman

That is currently being considered by the Department because one must apply for licences to each county council.

Mr. Jones

One must deal with every division of the ESB and Eircom, which does not help transport.

Deputy Shortall

No one denies that there is a need for a decent roads network throughout the country. If one is bringing goods from Killybegs to the centre of Dublin, there is not much point having a great road from Killybegs, getting stuck on the N2, N3 or M50 and trying to deal with the congestion in Dublin. Surely it is in IBEC's interest, from the point of view of the business community, that the Government should deal with the issue of commuter transport and decent public transport in the greater Dublin area in order to free up roads. This is why I am saying there is a need for better balance between spending on roads and public transport.

I asked earlier about the crucial infrastructure Bill to which Mr. Lyden was trying to reply.

Mr. Lyden

As we have not seen the current draft, we would only be speculating on its contents. Unless it deals with more than just planning issues, it will have limited effect. There are many more delays than purely in the planning process.

Deputy Shortall

Has IBEC been in correspondence with the Department on the matter?

Mr. McCabe

We have had discussions with the officials but we found it difficult to discern precisely what the Bill will contain. As Mr. Lyden said, we would ask the Government to produce the heads of the Bill as soon as possible because this discussion has gone on for too long. We are anxious to see the text of the Bill.

Senator P. Burke

I would like to ask Mr. Jones a question. In regard to Killybegs, Galway or Limerick, is there a much greater cost per tonne or per unit of transport involved in taking ships round the west coast? I presume it would be more expensive during the winter.

My second question, to Mr. Lyden, relates to fixed contract prices. If contractors were asked to build an office block for a private individual, I have no doubt it would be much cheaper than if they were asked to build the same office block for a local authority or the State. That is the impression the public and public representatives have. Every public office block or construction project takes on a life of its own, which is why members of the public have grave concerns in this regard. Given that we are becoming involved in public-private partnerships, very few will be able to become involved in the tendering process. I am very sceptical about public-private partnerships. While, on the one hand, they are good, on the other, I have mixed feelings about them. The public perception is that public bodies are a vehicle for private contractors to make huge sums of money and there are no real cost controls in place.

Deputy Connaughton

Further to what Deputy Shortall said on the infrastructure Bill, what are the representatives' major concerns about the legislation? We are all concerned about the planning permission aspect but what other major changes would the representatives like to see if and when the Bill sees the light of day?

Mr. Lyden

I would like to see a structure whereby once the Minister had made an order — for example, the motorway order — there would be just a small opportunity to object to a project on any grounds. This may be a judicial review period of three months for the procurement decision but all other aspects of the project should then proceed. Once the Minister has signed the motorway order, for example, it means the Government has made the decision in the common good and everything else must dovetail in with that decision.

We cannot have somebody producing a law on archaeology dating from 1900 or whenever and saying that we have not dealt properly with the matter. What is missing in such objections is proportionality. In Carrickmines, for example, part of the contract under construction was held up by an issue about the validity or otherwise of a particular decision of the Minister as to whether it was a national monument. The decision that had to be taken by the court was about the interpretation of an Act.

If the Minister's decision in terms of the motorway order had the same status as an Act, would it not supersede any other legislation that had been dealt with properly in the formal process? This would give us a hierarchy. We need to put the Minister's order at the top of the hierarchy. We have various checks and balances in the process such as, for example, environmental impact studies and archaeological surveys. They should all be done by the time the Minister signs the order. However, once he has signed it, that should be the end of the matter. The train will have departed and nobody should interfere with it.

Deputy Connaughton

I could not agree more with Mr. Lyden. Hopefully that will happen. However, what about access to a superior court?

Mr. Lyden

The theory of how it should work — for example, with regard to a decision on archaeological work — is that this stage should happen early in the process. It could happen while planning permission was being sought.

Deputy Connaughton

Does that mean that if it was not thought of early on, it could not be reintroduced?

Mr. Lyden

There should be a formal process. We should have to go through an archaeological checklist and do whatever is required from an archaeological point of view. However, once that is done properly, it should not be revisited. Take Carrickmines as an example. Whatever we think about it from an archaeological point of view, if the Egyptians could move Abu Simbel up the side of a mountain when building the Aswan Dam, could we move the Carrickmines wall 100 yards to the east? If we reinstated it there exactly as it was, would we be any worse off?

Deputy Connaughton

What would happen to the Egyptians if they came to do it next week?

Mr. Lyden

Senator Paddy Burke asked about fixed price contracts and whether an office block being built for the private sector would cost the same as for the public sector. There is a perception that it would cost more for the public sector. The public sector uses professionals to control costs. If they are briefed properly, there is no reason the contractor should get paid additional moneys. The major effect on construction costs and cost overruns on construction contracts is changes to the initial brief. If we fix the design before going to tender, we get very few variations. It is with regard to the process of fixing the design that many projects fall down. I mentioned earlier that projects should include a contingency sum in that regard.

Mr. McCabe

Perhaps I can add to that, although we are moving somewhat off the subject. There is a phenomenon called "specification creep". Much controversy surrounded the Cork School of Music in this regard. People said that it was initially costed by a group at a certain price but it ended up costing five times as much. That is a good example of the phenomenon. Initially, the concept for the Cork project was a rebuild but as it got under way, the administrators and academics got their hands on it and started to add different elements. The project then moved quite drastically away from the overall specifications of what was originally envisaged. There were comments subsequently about Steinway pianos in every room. This is often what happens. We could put it down to a lack of discipline or ineffectual project management skills. Often, the specification that emerges when we come to procurement is very different to the original concept. Perhaps that does not happen as much in the private sector.

Senator P. Burke

Maybe those projects are thought out better at the beginning.

Mr. McCabe

That is what I mean.

Mr. Jones

There was a query on the cost of shipping on the west coast versus the east coast. Most of our commercial ports are based in the east or the south east. They are on established short shipping sea routes and have roll-on roll-off pallet-type freight. They do not involve huge bulk materials. Savings in shipping come where we have large bulk materials coming into deep water ports. For example, we are currently considering importing 300,000 tonnes per annum for a particular client whose materials come from South Africa in bulk shipping. If I take Killybegs as an example, it will not be any cheaper for the handling charge. There is no real saving. We might end up paying 50 cent a tonne less than we would at Belfast or Larne. The big saving comes from being able to take a 70,000 to 80,000 tonne vessel into Killybegs. In unit shipping costs from South Africa, the figures are mind-boggling. Our nearest competitor, Derry, has a restriction of 30,000 tonnes for bringing in commodities. We knock Derry out of the water.

The benefit for Killybegs is in large bulk materials. We are not on main shipping routes but we are trying to establish and market the port. The Department of Communications, Marine and Natural Resources recently completed the initial stage of a marketing programme for the port of Killybegs. Looking at the future, Killybegs is considering linking with the east coast of America for bulk commodities. Pallet-type freight is not being targeted because Killybegs is not on a major route. As most of that freight comes from Europe, there is no reason for it to go up the west coast. I hope that answers the question.

Chairman

I thank Mr. McCabe, Mr. Lyden, Mr. McGarvey and Mr. Jones for their presentation. We went outside of the original subject of debate. However, members will have gained some information. If our visitors wish to return to the committee at some stage, we would be glad to deal with any questions they might pose. We would encourage them to get involved with their colleagues in Northern Ireland in respect of trying to get an all-Ireland transport network in place. We can no longer deal on a divided island. It is small enough and should be dealt with as one.