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Seanad Éireann debate -
Wednesday, 16 Feb 2005

Vol. 179 No. 8

Development of BMW Region: Statements.

I welcome the Minister to the House for statements on the progress in relation to the development of the BMW region.

I welcome the opportunity to open this debate. While the focus of the debate is on progress in the BMW region, it is important that we reflect at the outset on the major economic strides the country as a whole has made in recent years. As I will indicate in my address, the BMW region has very much shared in this progress.

A thriving economic climate has been created in Ireland over the past decade and we have recorded one of the best economic performances in the world. From 1997 to 2003, Irish gross domestic product grew by an average of over 7.5%, compared to an average of just over 2% in the Union. The fruits of this economic success have been put to good use and have benefited people the length and breadth of the country.

The taxation system has been significantly reformed, public services have been improved and provision for the future has also been made with the establishment of the national pensions reserve fund. Our public finances have been put on a sound footing and the general Government debt level has been more than halved from 74% of GDP in 1996 to 31% last year.

The unprecedented growth rates of the past decade could not be maintained indefinitely. We are now moving towards a more sustainable level of annual growth of 4% to 5%, still more than twice the EU average. The key challenge facing us is to manage the transition to these lower rates of growth and to tailor our expectations accordingly. This is particularly important in the context of this debate when we will no doubt hear strong arguments for higher levels of investment of taxpayers' money. With this in mind, I ask Senators to reflect on the following two considerations.

First, it is imperative to both our national and regional social and economic well-being that we remain competitive. We must focus on competitiveness if we are to copperfasten the economic progress we have made so far and enhance our capacity to grow in the medium term. In particular, we must keep our labour costs competitive and this has implications not just for the level of pay increases but also for the level of payroll taxes which can be levied.

The second consideration is that maintaining the public finances on a sound footing is essential. We face many demands for improvements in public services while lower growth rates mean lower tax revenue growth. Our low debt ratio is an important positive but we must remain vigilant to ensure that we continue to enjoy stable public finances.

These realities require us to continue to pursue the correct economic policies to enable us to create at national level the resources for investment throughout the country. They also require us to prioritise investment in sectoral areas of best economic return, taking account of overall Government policy objectives. The key point is that investment in the BMW region or the country as a whole cannot take place in a vacuum. It must be built on the foundations of solid and stable national economic and fiscal policies.

The fact that we are addressing today the issue of development in the BMW region is itself a tribute to the outcome of the Government's negotiating strategy in the Agenda 2000 negotiations. As Senators may recall, Ireland went into those negotiations in the position that the country as a whole had no prospect of retaining Objective One status for Structural Funds. Our rapid and continuing economic growth since the mid-1990s meant that Ireland had well exceeded the 75% of GDP threshold for Objective One status.

Initially, it seemed the only option in the Agenda 2000 negotiations was to pursue a transitional movement from Objective One status for the entire country. This was certainly the fate the EU Commission had in mind for Ireland at the time. However, the Government was conscious that some regions were below the 75% threshold and adopted the policy of seeking to retain Objective One status for those regions for the period 2000 to 2006. I recall the scepticism of the Opposition when that negotiating strategy was brought forward.

The Government strongly pursued the retention of Objective One status for the BMW region in the Agenda 2000 negotiations, which culminated in the Berlin summit in March 1999. After intensive negotiating efforts, the Government's objective was fully achieved when agreement was secured on dividing Ireland into two regions for Structural Funds purposes. The BMW region was to retain full Objective One status for the period 2000 to 2006 while the rest of the country secured generous transitional arrangements for the phasing out of Objective One status.

The outcome of the Berlin summit, in so far as Structural and Cohesion Funds are concerned, was a major success for the Government's strategy, leading to continuing significant transfers of funds to Ireland in the period 2000 to 2006, notwithstanding the major economic strides we had made by 2000. The agreement provided for €3.8 billion of structural and cohesion transfers over the seven-year period. An additional €600 million of Structural Funds was allocated for the BMW region on foot of its retention of Objective One status, bringing the total Structural Funds allocation to €1.4 billion. In addition, the Government secured the retention of a much more favourable State aids regime for the BMW region.

It is only fair that I acknowledge the support the Government received at that time from the relevant regional authorities and the newly-created regional assembly for the BMW region. It should also be recorded that the assembly has discharged most efficiently its responsibility as managing authority for the regional operational programme under the national development plan.

The National Development Plan 2000-2006 built on the regionalisation approach adopted by the Government in the Agenda 2000 negotiations. It set out an unprecedented level of national investment, €51 billion in 1999 prices, in key economic and social areas. A particular focus of the NDP was a major enhancement of the economic and social infrastructure of the country through an investment of some €22 billion over the period, of which €6 billion related to the BMW region. This constituted a significant increase in investment in the region over previous levels in key areas such as transport, social and affordable housing, environmental services, education and health.

The Government viewed the initial allocations in the plan published in November 1999 as indicative in nature, as was clearly stated in the plan as published. Senators will accept it would be impossible to set out precisely, seven years in advance, the yearly outturns for the many areas of investment encompassed by the NDP. By reference to the initial investment profile set out in the plan, investment in the BMW region at mid-2004 in the key area of economic and social infrastructure was some €660 million below the target set. Exchequer-funded investment in the infrastructure in the region was only €240 million below profile.

I assure the House that over the remainder of the NDP, the BMW region will see a significant increase in investment in economic and social infrastructure. I will elaborate shortly on how I hope this objective will be achieved. Before that, however, I will give some examples of enhancements to the infrastructure of the BMW region under the NDP. In the area of transport infrastructure, almost €2 billion has been spent since 2000. Projects completed or continuing are leading to major improvements to key routes in the region, such as the M1 Dundalk western bypass, the N2 Carrickmacross bypass, the N4 Sligo inner relief road and the N5 Strokestown-Longford road. The key rail lines into the region were completely upgraded by 2003 and significant assistance has been given to its regional airports.

More than €749 million has been invested to date in non-national road projects in the BMW region, contributing to the improvement of almost 20,000 km of non-national roads. The second and third phases of the broadband metropolitan area networks, MAN, scheme is being rolled out and will cover all towns in the region with populations of 1,500 and over by the end of 2006. This is an important initiative in the context of the region's future economic development.

Almost 8,000 child care places have been created, with significant further investment planned before the end of 2006. Much progress has been made in the area of environmental services, with expenditure to date of €634 million on the economic and social infrastructure operational programme. In addition, expenditure on the rural water measure in the BMW regional operational programme is more than €100 million and 103,000 people in the region are benefiting from improved group water supplies.

These examples of major outputs arising from capital investment are replicated in other key areas such as housing, health and education. The Exchequer also heavily subsidises the operation of certain services in the region. For example, there is significant subvention of passenger rail and air services into the region.

At a macro-economic level, significant progress has been made in the region since 2000. Employment in the BMW region has grown by some 33% in the past six years, representing an average annual growth rate of 5%. In early 2004, there were some 120,000 more people in employment in the region compared with the beginning of 1998. This is a phenomenal rate of employment growth by any standard and is well ahead of the national employment growth rate. Unemployment in the region is at approximately 4.5%, indicating almost full employment. The latest published data indicate that output per capita, measured in terms of GDP, was 88% of the EU-15 average in 2001, compared to 79.3% in 1998. I do not doubt that the region has since then converged much closer to the EU average. The BMW region is now the second wealthiest Objective One region in the EU.

BMW representatives have been critical of the pace of investment in transport in particular in the BMW region as compared with the south and east region. I accept the BMW region has to date lagged behind the other region in this regard by reference to the initial profile of NDP investment. However, the BMW region benefits from investment in transport, especially road infrastructure, in other parts of the country. For example, most of our ports are located in the south and east region and much of the exports from the BMW region are routed through these ports. In addition, much internal business is conducted between the BMW and Dublin regions. Without good and efficient transport links to the Dublin market, and onwards to the major markets in the UK and Europe, businesses in the BMW region will suffer cost disadvantages.

It is my objective to see increased levels of investment in infrastructure in the BMW region. For the remainder of the plan and beyond, the financial framework for investment in infrastructure will be governed by the five-year capital envelopes launched in budget 2004 and rolled over for another five years in budget 2005. When account is taken of the envelope provisions for 2005 and 2006, total Exchequer resources available in these years for investment in the key infrastructure areas is well in excess of that originally planned for under the NDP. Accordingly, there is scope for additional investment in the region in these years over that originally projected.

As Senators will realise, decisions on project selection in individual areas are generally taken by Ministers and Departments under the delegated sanctions on capital expenditure from my Department. Of course, they do not do this in isolation but in a manner consistent with Government priorities. In this context I have no doubt that my colleagues will be particularly attentive to need to increase the level of investment in the BMW region between now and end 2006.

I will now briefly address the post-2006 situation on two levels, namely the Structural Funds outlook and, more generally, the sectoral investment and regional development in that period. Last year the European Commission published its proposals for the planning period beginning in 2007. These proposals have implications for Ireland and for the BMW region. Since contributions to the EU budget are based broadly on a country's relative income, Ireland will pay a higher share of the financing of the EU budget. In addition, as our per capita income increases, we become less eligible for support from the Community budget in the form of Cohesion and Structural Funds.

The result of these developments is that over the seven years from 2007 to 2013, Ireland will receive a much lower level of net transfers from the EU budget than we previously enjoyed. We will continue to be net recipients from the EU budget for the initial years of the 2007 to 2013 period. From approximately midway in the period, we will become net contributors. This rather dramatic turnaround is the result of the very positive economic progress of recent years. While recognising that EU membership has been good for us and that EU budgetary transfers have assisted in our economic progress, we will still be defending our national position in the current budget negotiations as strongly as any of our partners.

Nonetheless, it must be recognised that the Border, midlands and west region, because of its comparative prosperity, will not qualify for Objective One status under the proposals. Instead the BMW region will qualify for enhanced support under the Commission's proposals to achieve regional competitiveness. This transitional support will be at a more reduced level than under the current round and will need to be concentrated in a few key sectors linked firmly to the Lisbon Process if the Commission's proposals are accepted. In essence, after 2006, the Structural Funds transfer to the BMW region will be more modest. This means that even more so than under the current plan, investment after 2006 at national and regional levels will have to be funded from our own resources.

The Government has made no decision as yet on whether to have a successor to the current national development plan and, if so, what it should encompass. I would be interested to hear Senators' views on the subject in today's debate. As I have stated already a medium-term capital investment envelope is now in place, which sets the financial framework and programme prioritisation out to 2009. As Senators are aware, in the budget I announced agreement in principle to the idea of a ten-year envelope for transport. I expect that the Minister for Transport will submit his proposals in this regard to the Government in the near future.

The Government is committed to maintaining the current high levels of capital investment, approximately twice the EU average, over the next five years and perhaps for a number of years beyond this. It will be considering if and how this commitment needs to be given greater expression through the articulation of sectoral policy priorities in a new national development plan. Whatever the post-2006 scenarios there is no doubt that the BMW region will lay claim to significant investment in infrastructure in the coming years. As already stated, I am sympathetic in this regard. However, I expect any submissions I receive from regional interests on the issue to be characterised by two key necessities — an economic return from the programme or project being promoted and prioritisation within programmes and between projects.

Given the demands for improved public services nationally we will never have sufficient resources to satisfy all needs. Therefore, the Government must prioritise by reference to what yields the best economic and social return. For example, in the area of transport, it is particularly important to avoid wasteful duplication of high levels of investment on the same routes across all transport modes unless a strong economic case in favour of such duplication exists.

I would like to make some brief comments on the general issue of balanced regional development. Over the period of the current plan, while the BMW region made rapid economic strides, little progress has been made on narrowing the gap with the other region as that region has also benefited from the prosperity of the country. However, it must be borne in mind that the southern and eastern region has significant areas of deprivation including in the larger urban centres. Simple comparisons between the two regions do not tell the whole story.

The major new factor is that we now have a template for balanced regional development through the national spatial strategy. The national spatial strategy does not focus on a two-region approach but has rather designated a number of new gateway towns and hubs through which to drive greater balance in regional development. As it happens the four new gateway towns or centres in the national spatial strategy are in the BMW region. The national spatial strategy has a 20-year horizon going beyond 2020. It will be important for the future and especially beyond 2006 that investment choices at national and regional level take full account of the national spatial strategy framework. While this approach will probably benefit the BMW region, it will be firmly grounded in the national spatial strategy.

The BMW region has benefited significantly under the current national development plan and has made strong economic progress across many headings. The infrastructure needs of the region mean it has legitimate claims to an increasing level of investment over the medium term. The national spatial strategy provides the template for promoting better balance in regional development in all parts of the country. I look forward to hearing the contributions of Senators and thank them for their attention.

I wish to share my time with Senator Paddy Burke.

Is that agreed? Agreed.

I welcome the Minister to the House and I thank the Leader for arranging this discussion on the BMW region. The topic was raised by many Senators in recent weeks and I am glad we have the opportunity to discuss with the Minister the issues Senators have with the progress in its development, particularly as it relates to transport and infrastructure.

In his remarks, the Minister placed particular emphasis on competitiveness. We all agree with him that it is vital for the future development of the economy to maintain our competitiveness. However, this is in marked contrast to his antics and those of his Government colleagues in the last general election campaign when, for political expediency, the notion of competitiveness seemed to be cast aside completely in an attempt to gain electoral success. While this was obviously ultimately successful, it saw our competitiveness reduce dramatically when compared with other countries in Europe and the world. Ireland dropped from being in the top five in the world competitiveness league to being somewhere in the 30s in a very short space of time, which obviously happened as a direct result of Government irresponsibility. I am glad that in his new role as Minister for Finance, the Minister seems to be returning to the need to promote our competitiveness, a matter on which he will find no disagreement from this side of the House.

The Minister also referred to the national spatial strategy, about which I have not heard for some time. While many on this side of the House were sceptical as to where the plan stood, in his concluding remarks the Minister made it clear that it still exists. I would be interested to hear the views of other Senators on the different provisions announced in the spatial strategy, many of which appear to have been cast aside since its announcement.

The Minister also referred to the national development plan and suggested that a successor might be introduced on the expiry of the existing plan. I would like to see it continue with special emphasis on infrastructure and particular reference to public transport. To date public transport has not been satisfactorily addressed in Dublin or in the BMW region and its need for the western rail corridor. When establishing a successor to the national development plan, I urge the Minister and his colleagues to place particular emphasis on this area.

The census in 2002 revealed that 18 counties, all outside the eastern region, recorded significant areas of rural population decline. Experts predict that the population of rural Ireland will decline by a further 20% in the next 15 years, which represents a very significant population decline.

The Minister referred to investment in road and rail infrastructure. I would like to discuss a couple of issues in that regard. A report produced by Indecon stated that road investment in the BMW region under the national development plan is well below the expenditure target. The report's finding that less than half of the projected funding for the roads programme in the region in 2002 was spent is most alarming. The Government failed to prioritise a single major roads project in the west of Ireland in 2003.

Seven major roads schemes were started in 2003. Some €1.26 billion was spent by the National Roads Authority on roads and bypasses in that year. Most of the work took place in regions which have already been developed. Some €445 million was spent on roads projects in the Dublin local authority areas in 2003 but funding of just €68 million was provided for such projects in Connacht in the same year. The roads schemes which were commenced in the BMW region in 2004 include many which were intended to be completed by 2006, under the national development plan, but are now significantly behind schedule. According to the Western Development Commission, just €926 million of the €1.5 billion allocated to the BMW region in the first three years of the national development plan was actually spent. Some €644 million that should have been spent under the plan during that time was not spent.

The roads building programme contained in the national development plan is at odds with the national spatial strategy, which was mentioned by the Minister in his opening remarks. The national development plan proposes a radial motorway network, with Dublin as its hub. The development of that network is considered to be of greater importance than the linking of road corridors to form an arc, curving through the south and west from Rosslare to Letterkenny via Waterford, Limerick, Galway and Sligo. The Minister spoke about road building schemes in the west and the BMW region, many of which are behind schedule. The N4 and N6 route between Dublin and Galway is many years behind schedule. We have not yet received a clear indication of when work on three or four separate projects on that route will be completed.

The national rail strategy, known as the strategic rail review, rejects the recommendations and principles of the national spatial strategy. A 20-year programme of investment in this country's railways, at a cost of €8.5 billion, is envisaged in the strategic rail review. That expenditure will be primarily targeted at improving rail services on Dublin-centred routes, to the exclusion of routes that underpin the national spatial strategy. The western rail corridor, which I have already mentioned, is an example of such a route. The reopening of the western line was dismissed as too expensive in the strategic rail review, which costed it at approximately €572 million. West on Track, which was established to investigate the feasibility of reopening the line, has estimated that it would cost €230 million to do so. Mr. Frank Dawson, Galway County Council's director of services, claims that the line could be reopened for €215 million.

The western rail corridor could be used to develop a cross-radial service, as well as commuter services to serve Limerick, Sligo and Galway. It could be used to connect cities, towns and rural communities along its route. The reopening of the western line could facilitate the expansion of the transport of Irish exports to international markets. The Minister mentioned earlier the facilities that are available at ports in the southern and eastern region, such as Rosslare and Waterford, both of which are served by railway lines. While such facilities are not in the BMW region, they could be used for its benefit. The western rail corridor could serve as a vital link between Sligo, Limerick and Waterford ports, which are currently served by substandard roads. Not only would an effective rail link overcome the roads problem, but it would also have the added bonus of taking heavy goods trucks off the roads.

Job creation and population growth in rural areas would be much more feasible if the western rail corridor were reopened. The existing line could be reopened relatively easily if the Government took the initiative by entering into a public private partnership to develop commuter services for towns and cities along the route. It would then be quite feasible to introduce other services along the rest of the line. The western rail corridor should be used to stimulate development in the BMW region, rather than following development into the area. The Government's typical response is to say it will wait until development growth areas along the western corridor have become established before it will consider establishing a rail link.

The recent report of the enterprise strategy group recommended that spending on public transport in the west should be increased. The reopening of the western rail corridor would be in line with that requirement. When one considers that hundreds of million of euro are spent each year on the roads programme and other infrastructural projects, such as the Dublin Port tunnel and Luas, it is clear that the project's estimated cost of €250 million can be met. The Minister for Transport should invest in the western rail line immediately to make it viable, which is a key objective of EU transport policy. He should develop commuter services to Sligo, Galway and Limerick and the Mayo link between Ballina, Castlebar and Westport. The expansion of the rail network to include Knock and Shannon airports is important if we are to ensure their future viability, especially following the recent restructuring of Aer Rianta.

I was somewhat disappointed by some of the Minister's comments, just as I was disappointed about the revelation that the Government has consistently underspent in the BMW region. The Minister mentioned that Opposition Members raised objections some years ago when the country was divided into the BMW and southern and eastern regions for EU funding purposes. The objections raised at that time by those in the south east, which has consistently been the second poorest region in Ireland in recent years, were genuine and legitimate. I come from that area, which is not part of the BMW structure.

The Government has undermined its policy on the BMW region by underspending the funds it announced it would spend in there. The Opposition has particular qualms about the Government's current policy in that regard. I look forward to hearing the contributions of other Senators on the BMW region, which has not been developed to its full potential in recent years.

I thank Senator Phelan for sharing time with me. I thank the Leader of the House for arranging this debate, which I have sought for a long time, on the funding allocated to the BMW region. Has the region received its fair share of funding in recent years? The Minister answered that question earlier when he said that the region has not received a fair share. It is shameful that the Government has neglected certain parts of the BMW region. I do not doubt that certain areas within the BMW region have prospered as a consequence of investment. This country has received a considerable amount of money from the EU on the back of the BMW region. It is disgraceful to think that the Government has neglected to spend a considerable proportion of that funding in recent years.

I travel through counties Mayo, Roscommon and Longford on my way to Dublin every week. I have not noticed any real change in such areas over the past seven or eight years. Although the railway line been refurbished in recent years, as the Minister said, it has cut just 20 minutes from the four-hour journey between Westport and Dublin. We await new signalling equipment to cut further time from that journey.

I would like to speak about employment in the BMW region, particularly in Castlebar and the rest of County Mayo. Some 1,000 jobs were lost at Volex in Castlebar and 350 jobs were lost at Allergan in Westport in recent years. These jobs have not been replaced and there is no sign of a replacement. It is a disgrace that IDA Ireland does not seem to have any plans for further job creation in County Mayo. Many jobs have been created throughout the country in recent years, but no jobs have been announced for the Mayo area. Will the Minister ask IDA Ireland to outline its plans for that part of the BMW region?

Knock International Airport has reached agreement with a number of air carriers and requires funding to expand. It is pressurising the Government for funding for certain developments required around the airport in this regard, but it is doing so to no avail.

At a meeting of the Joint Committee on Transport yesterday, a submission was made on the open skies policy between the European Union and United States. One issue that arose was the need to strengthen existing services and provide further essential services around airports such as those at Knock and Shannon. If there is to be an open skies policy and further flights into Dublin, a balance must be achieved in the regions. Extra facilities will be required in the regional airports if they are to be viable and generate more traffic.

There has been no work done on the national primary route from Westport to Dublin, particularly the section from Westport to Mullingar. If anything, a backward step has been taken. The busiest part of the N5 is from Castlebar to Westport but works on this stretch have now been put on the long finger. There is no sign of progress at all regarding the national secondary route from Castlebar to Claremorris, which is a very busy road. All of these projects were prioritised in a needs study conducted some years ago.

The Government is now seeking a contribution of 20% from local authorities for waste water treatment facilities. Towns such as Castlebar are seeking funding of €50 million to provide waste water treatment plants but the Government's request for a local contribution of 20% will mean that they will have to raise €10 million to €12 million if their waste water treatment units are to be developed. This is scandalous considering that funding was obtained for such projects in the BMW region. The Government wants the ratepayers and business people in the BMW region to foot the bill although areas that are not in that region had to make a local contribution of only 4% or 5%.

I wish to share my time with Senator Feeney.

Is that agreed? Agreed.

I welcome the Minister of State and his officials and I welcome the Minister's speech. It was important to set this debate in its general economic context and note that Ireland has managed to maintain an exceptional economic performance over many successive years. Senator John Paul Phelan is wrong that we have lost competitiveness. I recommend to him an article on this subject in the ESRI's quarterly published not more than a week ago. It shows under several different headings, including in respect of growth, employment and public finances and particularly in respect of our market share in different industrial sectors, with the exception of the footwear and clothing sectors in which we have lost EU market share, that our market share has improved considerably and, in some cases, dramatically so over the past few years.

We all know that the division of the country into two regions was primarily to secure continued structural and cohesion funding under Agenda 2000. However, it was equally acknowledged in the Minister's speech that the breakdown does not reflect exactly the regional breakdown in income terms. According to the latest figures, which date back to 2000 and 2001, several counties in the south-east region, for example, have lower incomes per capita than some of the counties the Senators mentioned, such as Galway, Mayo and Roscommon.

Let us consider the real regional policy issue. The greater Dublin area has been the engine of growth for the economy in many respects and I do not in any way begrudge it this growth. However, income figures suggest that our major cities, including Galway, Limerick and Waterford, have a higher per capita income than some of the counties that do not have such strong centres. It is a real challenge to maintain a balance.

Some of the debates we have been having on transport and so on have proven that the greater Dublin area is capable of soaking up billions of euro. In that regard, I believe the contribution of the Minister of State at the Department of Transport, Deputy Callely, was mentioned this morning on the Order of Business. However, it is also the case that relatively small amounts of money in comparison to the amount that could be soaked up by the greater Dublin area can make a considerable difference to the regions. I quoted an example pertaining to railways last week. There has been much discussion of railways although they do not necessarily comprise the only subject we should be discussing. The renovation and reopening of a certain length of line to Midleton would cost approximately €45 million while the renovation and reopening of a similar length of line, such as that going to Dunboyne, would cost approximately €145 million. The difference in price is largely due to the cost of land acquisition.

The Minister made the important point that the BMW region has grown by some 33% in the past six years and that 120,000 more people are in employment. He stated it is now the second wealthiest Objective One region. However, there is a catch. I keep making and clearly need to continue making the point that there is a difference between GDP per capita and GNP per capita. The former makes us look very good. It flatters us and makes us the third wealthiest country in the EU, but it is not actually real. Therefore, we should bear in mind the latter. I know many of the statistics are not measured in this way and therefore we need to keep our feet on the ground.

There is no doubt that since the introduction of the national development plan, significant extra industrial investment has taken place in many parts of the BMW region, although not necessarily in all parts. In the mid-1990s, all funds, apart from some which were spent on a major project in Clonmel, were pumped into the greater Dublin region. This has changed, which is for the good. On the other hand, colleagues from places such as south-west Donegal, where the electricity capacity is not really sufficient to support industry and where there are questions over the lines of communication, will state that there is a problem associated with attracting investment to such regions. North-east Donegal obviously has the advantage of being closer to Derry and can therefore benefit from major cross-Border energy plans.

Senator Paddy Burke referred to less glamorous matters that are very important for development, such as water treatment plants. There is very little political mileage in such projects but they are vital to underpin development.

Bearing in mind that there will be relatively little funding after 2007, the Minister asked for our views on whether there is value in having a national development plan. I believe there is because it provides an overall framework at which one can look. It would also be useful in the context of social partnership discussions. While there are multi-annual envelopes for various sectors and one can argue that it is not strictly necessary, the overview is valuable.

The Minister talked about not duplicating investment, particularly in the area of transport. Choice is a fundamental economic principle. One can spend two hours commuting each way in a car or half an hour in a train even if one must stand. In congested areas we need all possible modes of transport. The Department of Finance should not use this as an excuse to say that as there is a higher return on roads all the money should go into roads and we should forget about public transport. That is not happening but such an argument should not receive support.

Clonmel, one of the most dynamic towns in the country, was not chosen as a hub or a gateway in the national spatial strategy for reasons I do not understand.

That might be because it is not in the BMW region.

The Senator wants to extend the BMW region.

It is one of the most successful regional towns in the country. This underlines that we do not live in what used to be called a planned economy. Market forces play a major role in economic development and they like Clonmel. People involved in drawing up the plans should remember that these factors are indicative and be fluid and flexible. One cannot simply dictate a development from the top. Seán Lemass knew this in the 1960s.

I warmly welcome the Minister of State, Deputy Batt O'Keeffe. I also welcome the Minister's speech and thank Senator Mansergh for sharing his time.

We have benefited significantly from EU Structural and Cohesion Funds. The prudent far-seeing financial management of the economy by the Government has resulted in Ireland becoming wealthier than any of us could have foreseen or imagined. Our national income is above the EU average, something of which we are all very proud. We must now, however, ensure that our wealth is spread throughout the country, and investment should positively discriminate in favour of the peripheral economic regions.

The BMW region falls below national averages in many respects, including income per head, population growth, and public transport investments. We must strive to narrow the differentials through further investment in infrastructure, particularly in the west and north west.

It was rather worrying to hear the Minister say that post-2006 Structural Funds transfers to the BMW region would be modest. As his speech progressed, however, it was encouraging to hear him emphasise that investment choices at national and regional level would take account of the national spatial strategy which in turn would benefit the BMW region. As one who has lived there for over 20 years, I am glad Sligo is a gateway. I hope that will be the result of the enhancement of the north west.

I am also delighted by the idea of decentralisation but we must be rigorous in pushing this forward. It is a great stimulus to peripheral regions — 200 permanent Civil Service jobs in a provincial town are better and last longer than the jobs provided by a factory.

Three of my four children are in third level education and had to move away from Sligo to attend university. One is in Dublin and two are in Galway. Although Galway is closer to Sligo than Dublin and is in the same province, it is easier to travel to Dublin using the rail, road or new air services. The Minister attributed this to subvention for passenger rail and air services. Surely it is wrong that students are being taken out of the west to go to the east. We should try to keep them in the west, particularly their own province where the education is the same as that in the east. The western seaboard infrastructure must be a priority.

EU investment in Ireland over the past 30 years has helped it turn from being a beneficiary to a contributory nation. We must do the same for the regions. I am delighted by the Minister's objective to increase levels of investment in the BMW region.

I hope that the Minister of State will convey my comments to the Minister for Finance, Deputy Cowen. The Minister has brought together a group of consultants to review tax breaks on which he has an open mind. It is important that he retains that openness. It saddens and annoys me to hear the Opposition say that those tax breaks help the rich to get richer. That is far from the truth.

Will the Senator name those people? Who said that?

I refer to the Labour Party. I apologise to Senator Bannon for including him in that criticism. I will concentrate on directing my annoyance towards the Labour Party.

I travel from Dublin to the north-west twice or three times a week and see at first hand the extent of good housing developed as a result of rural and urban renewal. There are fabulous hotels dotted across the BMW region but I am most familiar with those in the Sligo-Leitrim area. They receive good publicity in the commercial property supplement of The Irish Times today.

Those facilities would not exist were it not for the reliefs we have enjoyed. Our investment in construction has created jobs and its continuing operation will remain an excellent asset. I urge the Minister to keep an open mind and not throw away the tax reliefs.

One of the Sunday newspapers carried a report stating that companies in the International Financial Services Centre have contributed more than €700 million in corporation tax in the last year, which is wonderful. That centre would not be there but for the far-seeing Fianna Fáil Government of the time and, in particular, Charles J. Haughey, when Garret FitzGerald tried to block it. It is wonderful that there are companies there——

The Senator is completely out of order.

Senator Bannon will have his chance——

Deputy Kenny first introduced the incentives when he was Minister for Tourism.

I was there at the time the IFSC——

I wish to correct Senator Bannon. He is not young enough to say that he does not remember that.

Senator Feeney is wrong.

I am approximately the same age as Senator Bannon and I remember Garret FitzGerald blocking the proposal for the IFSC. Were it not for Fianna Fáil, it would not be in place. Is it not wonderful that the centre contributes more than €700 million in taxes to the Exchequer?

Garret FitzGerald never trusted the leadership of Fianna Fáil at that time and he was proved right.

That was an interesting exchange, although the IFSC is not connected with the BMW region, any more than is Clonmel. I must concur with Senator Feeney on the IFSC, an idea for which Charles J. Haughey was widely criticised at the time. That is the reality.

The issues in the BMW region relate to the people, the environment and the infrastructure. The infrastructure allows people to engage with the environment. There are significant problems in terms of lack of investment in that area. In welcoming the Minister of State, Deputy Batt O'Keeffe, to the House, I would ask him to consider this aspect. I addressed a meeting last week in Mayo and I said that if I were examining the BMW region, I would start at the water and move eastwards, which is a difficult thing to do.

Senator Feeney gave a good example of the difficulty for her children travelling from Sligo to college in Galway. I have heard that example given on several occasions. All the infrastructure in the BMW region is heading eastwards, not north-south, which is a fundamental issue in terms of infrastructure. If we start at the Atlantic, how many significant fishing ports are on the west coast? If one travels from Castletownbere to Dingle, the next port is Killybegs.

There is Rossaveel.

Rossaveel is a processing area. It is not a huge fishing port and it would be nothing but for the efforts of a former Fine Gael junior Minister, Mr. John Donnellan, who many years ago ensured that it was developed. He must take full credit for that in the same way the former Taoiseach, Mr. Haughey, can take credit for the IFSC.

One cannot compare them.

There is no significant fishing port in the area. A friend of mine has a fish processing factory in Rossaveel. However, I would consider Rossaveel a port rather than a fishing port. Anyone who spends an hour there will agree with that. There is nothing of significance in Mayo or Sligo. It is an indication that the whole tourism aspect of angling has not been developed along that coast.

In terms of access, there is now a programme to invest in a number of marinas in that area, and not before time. Some committees have been asking whether they are good value for money. They are absolutely essential to opening up that whole area. There is a marina in Kilrush and there is a proposal to build one in Galway, perhaps on the Aran Islands. There is none on the west coast of Clare, or north Clare, which would be an ideal spot for a marina. There is also a proposal to build something similar in the Belmullet area, Sligo and north Donegal. This is what needs to be happening.

What is being done about our rail infrastructure? There should be a train every hour from Dublin to Sligo, Dublin to Ballina, Dublin to Westport, Dublin to Galway, Dublin to Ennis and Dublin to Limerick. That is the only way we will open up our rail infrastructure. In terms of the north-south area, that rail link must be established, and not just from the western rail corridor. There is not just a problem with the western rail corridor, there should be a rail link from Sligo to Limerick Junction or wherever and across to Rosslare on the existing line. This should be a viable upgraded line. This would open up a whole area of the country which has been ignored by the tourism industry. This cannot be opposed.

It all boils down to the quality of the water in our rivers, lakes, water supply and sewerage system. I agree with Senator Mansergh that sewerage systems are now developing right along the Shannon. There has been a significant improvement in all the towns in the west because of the establishment of water treatment and sewerage plants of various descriptions. A query was raised here recently as to where the plan is and how far it will go. There should be a national development plan after 2006, which should be directed at areas of the country that need a leg-up, so to speak. According to the latest reports from the NRA, the infrastructural plans in terms of roads should be up and running by 2010.

In regard to how people in these areas live, there are great difficulties with planning in the whole BMW region. If we take all the opposing or conflicting arguments, what is happening at the moment is not acceptable. Objections to granting planning permission every time someone wants to build a house in the area where they were born and reared must be considered in a measured, informed and focused way. I am opposed to people being allowed to build in an area just because they live there. However, I am equally opposed to the blanket opposition to building that takes place time and time again. An Taisce has been responsible for much of this over a long time. Hamlet development should be encouraged, particularly where there are existing houses. Someone who lives and works in an area should be given more consideration than someone who is building a holiday home.

While I agree that tax breaks should be examined, I would be opposed to the elimination of all of them. However, they should be examined because it was never intended that the super rich should pay no tax. Members of this House will be aware that many middle income people in their circle of friends have taken advantage of tax breaks. This does not apply to just the super rich. We also know there has been a gain in the hotel industry in particular. Senator Feeney's point is correct in terms of the quality hotels that are being developed throughout the west. The last time I spoke on this issue, I made the point that there was no hotel in Belmullet, for instance, which is a central area for golf, tourism and many other pursuits. A hotel is now being built in the area, which is very important.

The Senator referred to Sligo and Leitrim. However, what is being done to Leitrim village is not acceptable. A village that had 30 houses some years ago will now have 400 houses, with no appropriate infrastructure. Many of these will be ghost houses which are not lived in. We need to draw a distinction when planning permission is being granted in these areas so they are not overrun.

To return to the commuter issue, we must examine how we can serve Limerick and Galway. We hear every morning on the radio that the Oranmore roundabout and the Tuam Road are completely blocked. Senator Kitt said in this House some months ago that a commuter service from Tuam to Galway could be up and running in six months, whereas to build a road would take six years. In terms of infrastructural gain, this is what we should be considering. The week before Christmas 2003, a commuter service was opened between Ennis and Limerick. Its use has now quadrupled, even without building all the intervening stations such as Bunratty, Sixmilebridge and so on, which must also be considered. It indicates that there is a demand for this service, and there would also be a demand in the other direction. If Ennis-Limerick is viable, there is no reason Ennis-Galway would not be viable. If Ennis-Galway is viable, why is Galway-Limerick not viable? There is no doubt that a rail service into Galway would be a winner. Last month Iarnród Éireann began a new morning commuter service from Athlone to Galway. I have not examined the figures, but I intend doing so in the next week or so. I have no doubt that the train will be filled and used frequently. We cannot allow a situation to continue whereby the last train out of places like Sligo, Ballina and Castlebar, and back to Galway, is at 6 p.m. Even from Cork, the last train leaves at approximately 6.30 p.m. or 7 p.m. That is disgraceful. It is a waste of a resource for trains to be parked in stations overnight and not to be used. We should invest in our rail network.

A difficulty in discussing railways is that nobody working in CIE remembers the last time a railroad was built nor do they know anybody who worked on the building of one. People think that investment in rail infrastructure is a major undertaking but it is not.

We are discussing the proposed M3 route, against which I spoke trenchantly recently. However, I said that I supported the idea of an M3. Why should we not provide for a railroad running alongside that new motorway? We are talking about the Dublin-Dunboyne, Dublin-Dunshaughlin and Dublin-Navan routes. When building every new road why can space not be provided for a railway to run alongside, as is provided in half of the world? France is probably the best served country in Europe in terms of a railway service. Railways are still being built there. Only in the past two years a TGV line from Lille in northern France to the Mediterranean was opened. That is the type of development we need here. Given the cost of parking, motorists realise it is not worth the effort to drive into Dublin. These are issues that need to be examined.

In terms of support for investment in infrastructure — I acknowledge I did not deal with the road network — we should recognise all the smart advice from people on the east coast in regard to airports in the west, particularly in Galway and Knock, was that neither of them was viable. There was opposition to the provision of an airport at Knock from the two main political parties. Senator Mansergh will be quick to contradict me if I am wrong about that, but as I recall Fianna Fáil and Fine Gael——

No, Charlie Haughey was its champion.

But for him, it would not be there.

The airport would never have been built without him.

On the day the first aeroplane flew into Knock Airport, the former Senator Jim Higgins was there to meet it and I recall a conversation with him about the change of attitude of the Government of which his party was a member.

Charlie Haughey opened the airport.

Bring back Charlie.

Unfortunately, he is not well.

Have the Members opposite not had enough of Charlie?

The same applies to Fianna Fáil. There was no support for that infrastructure.

That is not true.

I used that example not to make a party political point but to make a different point. Every time I discuss infrastructure in the west with the experts, they tend to be based in Dublin and to come to a longitudinal conclusion on the matter. They point out the number of people who use the railways and say that if we were to invest many millions of euro in them and divide that amount by the number of people who use them, the investment would not be viable. They never talk in terms of the demand for the service. I am aware that Senator Mansergh shares many of my views on this. We must create demand for the service. Such development of the rail service would work and we need to move forward on that.

I have spoken on a number of occasions about the negative consequences of selling Eircom. It is not so much that many subscribers lost money on their investment in shares as the opportunity lost to extend the rollout of broadband to every corner of the country. That needs to be done and the necessary resources must be invested.

I was in the Galway Gaeltacht recently and noted that three companies were engaged in interpreting the written word, the spoken word and video work. They were able to do their business from the Lár-Ghaeltacht in Connemara because they had a broadband facility to transmit information down the line. They did not need to be based in a city. Ten years ago that type of industry would have had to be based in the centre of Dublin as that would have been the only place such companies would have had the necessary back-up. Those companies are a classic example of how broadband can open up the west and the extension of such facilities is crucial to achieving that objective.

Every time the issue of the west is raised, people take a broad view but unfortunately debate usually centres on constituency matters. The west needs to be considered by people who think beyond the basis of their constituencies and who will envisage a plan for its development. We have people who are open to change and are adventurous, entrepreneurial and considerate. They can ensure the growth of the economy of the west, not merely a continuity of its protection, that will match that of any in the rest of Ireland.

I welcome the Minister of State. I am delighted to have this opportunity to make a few points on this issue. The many representatives from the BMW region in the House have been seeking this debate for some time.

I welcome the Minister's speech and broadly agree with its main thrust, although I have some concerns about aspects thereof. We in the BMW region do not wish to have anything at the expense of people in any other region. We acknowledge wholeheartedly that there has been an unprecedented level of funding and improvement in the region in recent years. However, we are not much closer to closing the gap, which we would all hope to achieve at some stage in terms of balanced regional development between the BMW region and other regions. The gap still exists because improvements in the southern and eastern region are not in proportion to improvements in our region.

I want to change the focus slightly. The statistics that make the BMW region look as well as it does in certain respects result predominantly from the success of Galway and the south-east midlands, rather than the rest of the country. There is a line, not one I drew but which has been drawn by Departments, between Dublin and Galway. We have had an underspend of almost 40% on targets to date. That money is available and it is a disgrace that it has not been not spent. There can be no justification for that. I do not understand the reason for that and I call on the Minister, the cross-departmental team on infrastructure and the officials in the Department to put in place a plan to get that project up to speed as a matter of the utmost urgency.

When Departments examine the question of the infrastructure required in the west, they consistently fail to take account of the historic deficiencies in infrastructure in terms of building roads and so on. That must be done. The per capita scenario in terms of expenditure will not stack up in that region and will become worse unless we are prepared to invest capital in infrastructure in the area and achieve one of the primary objectives of the national spatial strategy, namely, to create capacity before demand. If we do not have the capacity, we will not have the demand. Seán Dorgan of the IDA has consistently pointed out that no level of IDA grant aid to foreign direct investors will compensate for a deficient or weak infrastructure. That continues to be the case.

I want to deal with a number of issues concerning roads. North of a line from Dublin to Galway we have the N4 and the N2 heading north. Neither of these is included in the national development plan as an inter-urban routes, despite the fact that these are trans-European networks according to the EU Commission. For example, while the N4 heading north west is a particularly good road at present, it is not earmarked for upgrading to dual carriageway or motorway status as would be the case in respect of roads serving other centres. There can be no excuse for that. In terms of drawing up a template for road improvements in the future, the national roads needs study of 1988 is the one that applies. That was put together by the National Roads Authority using historical vehicle movements, which are completely out of date in today's context.

In terms of energy requirements, we have heard about the problems in south-west Donegal. Senator O'Toole mentioned An Taisce which played a major role in blocking plans by the ESB to bring in a 220 kV line which is much needed and, as a result, no energy-dependent industry can locate there at this stage. We were pleased in Sligo that we made progress with our 220 kV line but there are other areas in the region that must be dealt with.

It is ironic that we have such reserves of gas off the west coast but we will not receive any benefit from them according to the CEO of Bord Gáis, who recently said that while everything was going well, there was a commercial mandate on the company and there were no plans to extend the network to the north west. I have a letter dated 21 March 2001 in which the then Minister of State at the Department of Public Enterprise stated that the Government had decided to extend the gas network to the north west and that the necessary arrangements would put in place as quickly as possible. I have no doubt that the Government is committed to extending the network to the north west but I would like the see the management of Bord Gáis making the necessary arrangements.

That letter was obviously written before the general election in 2002.

We should be doing a number of things to improve rail transport. None of the 400 new rail carriages being purchased by Iarnród Éireann is for the Sligo to Dublin line — we will get the hand-me-downs from the Cork line. We will be glad to get them, considering the 18th century stock we are currently using, but there is no visionary approach to the fact that 1 million people will locate around Dublin between now and 2020 and we want to accommodate them. Land prices and the costs of production, building and infrastructural improvements will be much lower if we look at the gateways and hubs that lie north of the line between Dublin and Galway and decide to invest in them and create the capacity for people to live. That will make these areas more attractive to foreign direct investors and stimulate indigenous industry.

The Minister of State thought they were all going to Laois.

Iarnród Éireann has closed its freight facilities in Sligo, which is a gateway city. From where did that decision come?

There is no university north of the line between Dublin and Galway, other than St. Angela's College, which is a constituent college. There are excellent institutes of technology, which are the shining lights of the region and are propping it up in many ways. We should seek a cluster of institutes of technology and make them into a north western university. The IDA has stated that intellectual property and physical infrastructure are the most valuable currencies when it comes to attracting foreign direct investment or stimulating indigenous commercial activity.

Last week outside Leinster House people from the south east protested that there is no radiotherapy centre in Waterford. I hope they get one but north of the line from Dublin to Galway, there is no radiotherapy facility and no plans for one.

The Minister said that any submissions made to him must have an economic return as a result of the programme or project being promoted and prioritisation within and between projects. In any other region I would support that, but it cannot be applied north of the line between Dublin and Galway and west of the eastern corridor to Belfast. If we go on a strict cost-benefit analysis, we are closing the door on the area north of the line between Dublin and Galway because it will not pay to put anything in place there. If, as the national spatial strategy aspires to do, we create capacity before demand, the people of those areas will rise to the challenge and create the good fortune for themselves.

The national spatial strategy is the best template for this State ever put together. When it was launched, however, I stated that there was concern about whether everyone would buy into it and that it might require legislation. I have given examples where we do not buy into it. If semi-State companies were conscious of the aspirations of the national spatial strategy, why are they closing freight departments in gateway cities? Why is Bord Gáis not going into the north-west? The maps of its network are laughable, the entire north-west is blank.

We must examine the national spatial strategy and ensure everyone buys into it. It should be the prime directive of any arm of the State that any plan conceptualised must dovetail with the strategy. That is not the case at present and that is a disappointment because it is a great plan. We must be prepared to create capacity before demand in line with the strategy and I call on the Minister and his colleagues to do more, on top of the great work we have already done in these areas and, if necessary, be prepared to borrow for it. China is gaining a competitive advantage — it laid 500,000 km of motorway in the past five years. There was not a single km laid in that time north of the line between Dublin and Galway and west of the Dublin to Belfast corridor.

I hope we will look at this region on a more strategic basis and invest appropriately because in time we will reap the rewards.

I compliment the Leader of the House for facilitating us with a debate on the mid-term review of the BMW region and I welcome the Minister of State to the House. I wish the Minister for Finance, the Taoiseach and the entire Cabinet were here to hear Senator MacSharry relate the neglect by the Government of the BMW region. He listed statistics in a range of areas from infrastructure through education to health. The Senator knows what is not happening in the BMW region and why there has been an underspend. As a Longford person I welcome the chance to discuss the lack of progress in a region which has much to offer to the native population and to visitors.

The BMW region has 47% of the land area of the country but only 27% of the population. It has a weak urban base, with only 32% of its population in urban areas compared with 68% for the rest of the country. The population growth rate of 1.7% between 1991 and 1996 is slower than in the rest of the country, with a population density half that of the national average. It is comprised predominantly of rural areas, some of which are disadvantaged and suffer from a lack of agricultural and infrastructural resources. After years of relative decline, however, recent years have seen some expansion, with output growing by 7.5% in current prices between 1991 and 1996 and the numbers at work growing by nearly 44,000 in the same period.

Some of the results of the mid-term evaluation of the BMW regional operational programme, however, are alarming to say the least. Little funding has been drawn down in several areas, including general rural development, e-commerce, agriculture, tourism and waste management because of Government bureaucracy, red tape and neglect.

Unlike the affluent connotations of its name, the BMW region did not have a tiger in its tank. While the southern and eastern regions have had a disproportionate share of the fruits of the Celtic tiger, we have had to make do with far less than a fair or equitable share. We urgently need to remove administrative obstacles and red tape and give more focus and drive to the operational programmes. If we do not fund them we will have to go back to the EU as happened in the past. However, we may not receive favourable treatment because a huge number of new nations are also looking for funding. It is, therefore, important that we spend the funding we are given.

The BMW region is urgently in need of investment in infrastructure, including roads, rail, communications, broadband and natural gas. It is a shame that natural gas is brought from the west through the midlands to the east coast while nearly all the towns in the BMW region are neglected. We have called several times for a spur to be brought from Athlone or Moate to Longford. To date, this has not happened and the Government seems to have no intention of doing it despite demands from development associations, county development boards and so on in the different counties.

The allocation of €600 million in the national development plan has not been spent in the BMW region. Moreover, the national development plan has failed to address the imbalance between the BMW region and the southern and eastern regions. Major deficits are still evident in these areas.

Despite increased expenditure on roads nationally, there is slow progress on the upgrading of many national and secondary routes throughout the region, for example, the N5 Kinnegad-Galway motorway, the N2, N3, N60, N62, N63, N52 and N55. I have called repeatedly for the development of the N55 because if it was properly developed it would divert much of the traffic from the east coast back through the midlands. It would make great sense to develop it. This case has been put forward several times by the Midland Regional Authority and also by the BMW regional assembly. There is wonderful support for it but the Government has not taken any initiative on it. With the national secondary routes being of the utmost importance to the BMW region, greater investment is urgently needed.

The Minister has travelled the N55 and seen the bottlenecks and the poor structure of the route between Athlone and Cavan. Something needs to be done. It must be given higher priority than it is getting at present from Government. The latest announcement by the Minister of State, Deputy Callely, surprisingly pre-empts the publication of any details by the Minister for Transport, Deputy Cullen, on a ten-year transport plan. It is hardly credible, let alone seeming to offer hope to the BMW region.

With the national development plan in its fifth year, spending at mid-term in the BMW region under the regional operational programme has been slow to date. Only 54% of the target expenditure was spent from January 2000 to June 2004, with agriculture and rural development reaching only 26% of the target for the period. Expenditure from June 2002 to June 2005 highlights the under-funding of the BMW region. On the productivity sector of the operational programme, the national spend is 62%. The spend in the BMW region is 39% while it is 61% in the southern and eastern regions. On the economic and social infrastructure operational programme, the national spend is 91% while it is 75% in the BMW region and 96% in the southern and eastern regions. The figures speak for themselves.

The BMW region urgently needs an improved rail service plan. This was referred to by other Senators. The reopening of the western rail corridor is essential to the provision of commuter rail services to the major towns. In addition the rolling stock and services on the Sligo, Westport and Ballina lines must be upgraded. This has been called for repeatedly. Another essential element, which has been a pet project of mine for a long time, is a central rail line linking the towns of Roscommon, Tullamore, Mullingar, Longford and Cavan in the midlands. It is important to begin developing in this region. To reach Cork from Longford or Westmeath one must go either to Dublin or Port Laoise. We deserve better than that in this modern era of communications.

Airport facilities are of growing importance in order to attract inward investment and tourism. With the competition now associated with the tourism industry and the changing face of holidays and holiday destinations, ease of access is essential to attract tourists to the region. Knock is the only international airpost in the BMW region, with the south west being served by three airports, Shannon, Cork and Kerry. Abbeyshrule Airfield, with which the Minister is very familiar, should be developed for the midlands. When he represented the constituency of Longford-Westmeath and Longford-Roscommon, the former Taoiseach, Mr. Albert Reynolds, gave a commitment to develop Abbeyshrule. That was a decade ago and little has happened since then apart from the efforts of the local committee.

A matter of grave concern is the complete lack of expenditure in the BMW region in important areas such as recreational angling and marine tourism. No resources have been put in place for regional sports centres or the development of a new swimming pool for Longford. These areas are an essential ingredient in any tourism package. We are still awaiting child care facilities. There is a huge number of applicants in the BMW region but the issue seems to have been put on the back boiler. It is important to recognise the areas of greatest weakness within the BMW region which have been repeatedly outlined. I will not cite the entire list.

A regional foresight study is being undertaken in the BMW area by the regional assembly. My brother, Larry Bannon, is the only Longford County Council representative on the assembly and he is doing his best. However, he is frustrated with the slow rate of progress and the fact that Government red tape and bureaucracy is preventing the assembly from drawing down the necessary funds to develop the region.

I hope the Minister will take note of what has been said today by the Opposition and by members of the Fianna Fáil Party. They are very disappointed, as are we, with the slow pace of drawing down funding for the various projects in the region. I hope we will see firm action after today's debate.

I have taken note of the Senator's remarks regarding Abbeyshrule.

I call Senator Leyden. We have seven minutes remaining before I call the Minister.

I wish to share my time with Senator Daly. Perhaps the Chair would indicate——

Perhaps we could extend the debate slightly, with the agreement of the House.

I do not believe we have that option. We are scheduled to finish at 1.30 and I will call the Minister at 1.25 p.m.

Can the debate be extended?

It is a matter for the Leader of the House. It also depends on the availability of the Minister.

I am sure the Leader is listening to the debate. If we move faster, we may finish on time.

The disappointment of Senator Bannon is nothing to the disappointment that would have been experienced if his party were in Government when we achieved Objective One status for the BMW region. That party had no plan to regionalise the country. Fianna Fáil took a very brave step.

Fianna Fáil was not in favour of Objective One status for the BMW area but was forced to accept it so there is no point in Senator Leyden bleating now.

I am not surprised by Senator Leyden's statement. He always speaks nonsense, not only here but also in the constituency.

The Minister for Finance, Deputy Cowen, was here earlier. I am delighted he came to the House. He made an excellent speech in this regard. I welcome the Minister of State, Deputy Parlon.

One of the most important points made by the Minister was the underspending of €650 million set out in the plan, although Exchequer funding investment in infrastructure in the region was just €240 million below the profile. We have time on our hands to get investment into the region before the deadline of 2006. That is the reason I suggest we concentrate on those projects that are ready to roll and can receive the necessary investment for regional development in the BMW area. One major project that will come to Government is the western railway corridor which should be reopened. A major investment of funds would be required to have it reopened.

Were it not for the input of the Leader, the then Minister for Public Enterprise, we would not have the existing railway system from Westport to Athlone. It was in dire straits as far as investment was concerned from a safety point of view. That rail line has been upgraded but the carriages have not been upgraded. The Government should invest in new carriages for that link out of the money that has been underspent. Those are the areas in which investment is required.

Horan International Airport at Knock was built by the late Monsignor James Horan in co-operation with the former Taoiseach, Charles J. Haughey. We stood by that project when others said it was a foggy boggy site and created Knock International Airport. More investment is needed in that airport to attract more business. I suggest that consideration be given to whether the €40 million can be given to Knock International Airport to improve existing conditions.

As far as schools are concerned, two school projects in my area, Scoil Mhuire gan Smál, Strokestown, and Elphin Community College, are seeking approval to invest in major developments of both campuses. That is developing the regions and the BMW area, particularly in a county such as Roscommon.

The Government promised that twice in the previous two elections.

I hope we can return to this debate. I ask the Minister of State, Deputy Parlon, to secure decentralisation as quickly as possible for the BMW region. There are a number of areas, including Knock, which have a Government Department and Roscommon has the Land Registry. We have much to be proud of in terms of "a lot done and more to do".

A lot more to do.

I congratulate the new Western Development Commission appointed today by the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, which includes Mary Devine-O'Callaghan, from my constituency, and Des Mahon, Mayo county manager. They work in conjunction with the BMW region.

I believe in the BMW region. I suggest that signs be erected on the building in Ballaghaderreen. We are proud to have the BMW region's headquarters but there should be large signs in the square indicating that it is located in Ballaghaderreen. Given that there are no signs to indicate it is in the town, I ask that some investment be made in the promotion of the BMW headquarters and the region.

I thank Senator Leyden for sharing time with me. What concerns me is that the plan is drawing to a close and will be finished in approximately a year's time. I was surprised to learn from the Minister today that no decision has been made by the Government to have another national development plan. It is critical that we have a further national development plan. If my contribution can be worthwhile in encouraging the Minister of State, Deputy Parlon, to speak to the Government about the necessity to do that, today's debate will have been effective.

I am more concerned about the issues that have not been dealt with in recent years. Unfortunately, when the BMW area was established, Clare was omitted. There are major problems especially on the west coast where there are small villages without sewerage systems and small fishing harbours in need of development. Coastal erosion has caused enormous damage and resources such as wave power, which has enormous potential, and the oil and gas reserves identified off the Clare coast at Spanish Point have not been harnessed. No effort has been made to undertake an investigation or exploitation of that huge resource of oil and wave power. My message to the Minister of State, Deputy Parlon, given that this development plan and the BMW region are winding up, is that some thought and effort be put in well in advance of 2006 in order that an overall national development plan will take account of the declining populations in the small villages, the neglect of sewerage facilities in villages——

I must interrupt the Senator for a moment because I need to clarify the position with the Leader regarding the extension of time. We need to know until what time we intend to continue.

The Acting Chairman has no choice as 1.30 p.m. was the time set on the Order of Business. It is a matter for——

The Senator is magnanimous as usual.

I have no choice in the matter. I am not the Leader. It is a matter for the Chair.

The Senator is saying we have to finish at 1.30 p.m.

I am not——

Would it be possible to allocate even a couple of moments to Senator Ulick Burke?

I have no objection whatsoever.

Is that acceptable? When Senator Daly concludes perhaps two or three minutes could be given to Senator Ulick Burke.

It is an informal arrangement.

Is the Acting Leader happy with that?

He is well used to them.

I will curtail my contribution to facilitate Senator Ulick Burke even though he would not do the same for me.

Is that agreed? Agreed.

I emphasise the necessity to put a new national development plan in place and to commence it now to deal with the shortcomings in the existing arrangement. It is unreal that substantial available funding has not been spent. How can we go back to the EU seeking additional funding if we have not spent what is earmarked? There is an urgency to expedite these plans and the provision of sewerage facilities, harbour facilities and marinas, as Senator O'Toole said, such as at Ballyvaughan which has been crying out for a marina for the past 20 years. Funding has not been spent while huge projects such as these could be developed which would have enormous benefits for less developed areas of west Clare.

Senator Ulick Burke has two or three minutes.

I greatly appreciate being facilitated. I thank the Leader for accepting my proposal last week on the Order of Business for a debate on the BMW region. On that occasion I highlighted the very point made by Senator Daly, namely, that €640 million was unspent last year. Whoever is responsible for that has to accept blame for the discrepancy between development in the west under the BMW region and the rest of the country. In 2000, there was a gap of 13.7% between the BMW region and the rest of the country. Today the gap is 13%. Therefore, that is a minimal change, despite all we have heard from the Government side about the huge investment and so on. The return is an 0.7% GDP improvement in the status and that is not acceptable. There is no commitment and no prioritisation by Government towards spending and improving the level of infrastructure and economic development of the west if that is the reality.

It is frightening to note the report by a Teagasc official last week that by 2020, the flight from the land will be worse than it has ever been in our economic history. Some 25,000 to 35,000 additional people will have left rural Ireland, particularly in the BMW region. No Government policy is in place to stem that tide and there is no indication of such a policy. It is clear from the budgets of the past three years that there was no response to agriculture, our primary industry in the past. Senator MacSharry said our natural resources were being taken out of the region. If we are talking about developing the west, why is there not a commitment towards it?

When Deputy Brennan was Minister for Transport he had an opportunity to show his intention of balancing the economic infrastructure and the input of resources. He provided €300 million for a feasibility study on the provision of the western corridor rail link. Estimates show that €215 million would provide that rail link between Sligo and Limerick. At the same time he was providing €3 billion for the provision of a rail infrastructure in Dublin. We have yet to see whether or not that will happen. Can this be called prioritisation? Is this an adherence to the principles of Objective One status? It is not.

Senator Leyden referred to this Government looking for Objective One status. It was hauled reluctantly into making a decision. It waited two years before making a decision. The end of the Objective One status will come in 2006 and the west will not have benefited pro rata in terms of the rest of the country. The Minister of State should take note of the figure of 0.7%. This has been the rate of improvement over the past five years. There will be no better rate of improvement. This is the record and the indictment of this Government. Even the Western Development Commission was starved of resources and finances at a time when it was willing to put forward improvement projects.

I am delighted to co-operate with Senator Ulick Burke and to hear his views. The Senator referred again to a further prediction about the demise of Irish agriculture. Those predictions have been made for the past 100 years. As someone involved——

Is the Minister of State rejecting the Teagasc report?

——-directly I know it is a resilient industry and changes are taking place all the time.

There are changes happening for the Minister of State.

Allow the Minister of State to speak without interruption.

With the support of both the Government and the EU I have no doubt——

On the margins of the BMW.

——that in six, ten or 15 years, there will still be a vibrant agricultural industry in the country.

We will see.

A number of Senators emphasised the need for investment in public transport. The Government's record in this area is exemplary. From a base of virtually zero investment in public transport in 1997, which is not that long ago, the Government is now providing approximately €0.5 billion per year for the sector, resulting in a major increase in public transport capacity, including improvements in the BMW region. The key rail lines into the BMW region were completely upgraded by the end of 2003.

That is a quick skip for the Minister of State.

The Senator has forced me to be quick. Those rail lines will be totally upgraded and there will be significant investment in the rolling stock. Iarnród Éireann was recently given approval for the extension of the rail network track and signalling project to the Westport and Ballina lines.

A number of Senators referred to specific projects in the transport area and these are matters to be dealt with by the relevant Minister. The Government is providing unprecedented levels of investment in transport, including public transport. In the period 2005-09, the Government will provide €10.15 billion. I remind Senators that there is pressure for spending in other important areas, particularly in health, and therefore expenditure and investment must be prioritised by the Government.

Senator Phelan expressed his support for continuing investment in infrastructure after 2006 which I welcome. This is in line with Government policy as set out in the multi-annual capital envelopes. However, I do not agree with his contention that our approach to investment in roads is out of line with the national spatial strategy. The key objective is to provide good links between the national spatial strategy gateways. The national development plan and post-2006 investment will achieve this aim.

The country's employment growth rate is one of the best in Europe. This proves that the country is competitive but we must remain vigilant. Employment rates are rising and employment growth is also in evidence in the BMW region.

The rate of unemployment in Donegal is 19% and it is 40% in Mayo.

I will deal with that point. As the Minister stated earlier, employment in the BMW region has grown by one third in the past six years. This is an annual rate of 5% which is exceptionally strong judged by national and international norms.

Senator Ulick Burke implied that there would be an underspend of the Structural Funds in the BMW region but I can guarantee this is not the case. The overall spend in the BMW region is behind profile. However, as the Minister stated in his contribution, the objective is to increase the spend in the region over the remaining term of the plan and Senators can be assured in that regard.

Was there not a €640 million underspend last year?

I welcome the support of a number of Senators for the national spatial strategy. As part of the Government's work to embed the national spatial strategy in the investment plans of Departments and agencies, these bodies must now report annually to the Department of Finance on the fit between their capital expenditure and the national spatial strategy. This is a critical part of the capital envelopes arrangements.

The BMW region is now the second wealthiest Objective One region in the entire European Union.

With what is the Minister of State comparing it?

The other Objective One regions. I compliment the Government for being so successful. If it was not for its success in negotiating the Objective One status for the BMW region, we would not be debating the issue today.

There are now 120,000 more people employed in the BMW region than in 1998.

The employment rate is 19% in Donegal and 40% in parts of Mayo.

It is not all doom and gloom down there. I wish Senators Bannon and Ulick Burke luck with their airport in Abbeyshrule. The BMW also includes my own county of Offaly and also Laois. More than €8 billion has been spent in the BMW region under the national development plan. More than half of this has been spent on capital infrastructure projects. Progress under the national development plan is accelerating and the objective is to continue this momentum until the end of the plan. The Government's commitment to balanced regional development is reflected in the national spatial strategy which will be forming future investment strategy.

Senator Leyden asked about decentralisation. I assure the Senator——

They are not interested now. The Minister of State should not open that can of worms at this late hour.

What happened to Roscommon?

Some tremendous progress has been made in Sligo, Knock and, in particular, in Portlaoise, Birr and Tullamore.

It is very good.

Will the Minister of State be sending out a new set of leaflets?

I assure Senators that there will be some very positive announcements in this area.

What about the leaflet drops?

I thank all Senators for their contributions which were generally very positive. I take note that a gap still exists. The fact that the rest of the country has been developing at such an unprecedented rate means that over the remainder of the plan, the Government will continue to work to narrow the gap.

Sitting suspended at 1.40 p.m. and resumed at 2.30 p.m.