Amendment No. 6 has already been discussed with amendment No. 2.
SECTION 9.
May I remind the committee what the amendment is about before we decide upon it?
Under Standing Orders I cannot allow that. The amendment has already been discussed and the majority of Members were present for that discussion.
I move amendment No. 6:
In page 10, between lines 37 and 38, to insert the following subsections:
"(4) No light railway order shall come into operation until the Minister has brought forward a detailed plan to integrate the proposed light railway with the existing Dublin Area Rapid Transit, Arrow and mainline railway systems and until such plan has been laid before and approved by Dáil Éireann.
(5) No light railway order shall come into operation until the Minister has carried out, published and laid before Dáil Éireann costings for alternative methods of construction and operation of the city centre section of the proposed light railway being the section falling within the functional area of Dublin Corporation.".
This amendment seeks the integration of the three systems in Dublin.
Amendment put and declared lost.
Question proposed: "That section 9 stand part of the Bill."
Section 9 allows the Minister to make a light railway order. This relates not just to the construction but authorises the operation, maintenance and improvement of a light railway under the Bill. The only organisation entitled to run a light railway is CIE. I do not see why CIE should be the only body capable of running a light railway in Dublin. Section 9(6) and (7) allows for the abstract and remote possibility that the Minister might revoke an order. I cannot imagine the Minister telling CIE to close the light railway.
There is no provision for anyone else to run a light railway. There is a crazy idea that the Minister could revoke the board's licence and CIE's independent board could go to the High Court to seek to be allowed to continue to operate the light rail system.
As it is there will be no connection between Luas and the other rail operations in Dublin. Therefore, there is no reason CIE should be the only body capable of running it. If CIE does not run the system well or runs it at a huge loss it should be open to the Minister to allow another body to run it. I am horrified we are tying ourselves to the proposition that only one body can run this system.
If the unified proposal was being discussed I would see the logic for whoever runs the other rail systems running the light rail system. However, since the light rail will be a free standing operation, it makes no sense that the only body the State can ask to run it is CIE. We should not accept that idea. Dublin Corporation or a private sector company could be asked to run it. We should ask the Minister of State to explain why CIE can be the only undertaker of the system when it is to be disconnected from the other rail systems.
I do not share Deputy McDowell's view.
The Deputy is going into the ideology. I am only looking for flexibility.
Ideology goes on both sides. CIE is the only body in the State with experience of running rail and bus systems. This is a light rail system.
It is the only body in the State that abolished the tram system.
That was due to a certain party that was in power.
At least William Martin Murphy actually ran a system; he did not tear it up.
The argument which Deputy McDowell was making would enforce the validity of CIE running the light rail because what we are looking for ultimately is an integrated system. Unfortunately, we are not getting it in this proposal. Ultimately, we want a light rail which will have potential for integration with the rest of the system whether it is the DART, the Arrow or the public bus service. That is my vision.
Unfortunately, for various reasons including funding, Luas has been designed in a way that does not allow for integration. The Minister has indicated that his long-term objective is to integrate it into the rest of the public transport system in the city. CIE is the most appropriate body to achieve this.
I would not like Dublin Corporation to run the system. That proposal has benefit. There is nobody in the private sector that could run it so there is no choice.
Which of the three CIE companies is it intended will run the system? Is there any estimate at this stage of whether Luas will operate at a profit or loss or will it break even? There is nothing in this Bill which suggests it will be a self financing project. I am talking about operations, not capital.
Amendment No. 3 sought to make provision for an instance where a future Government decided that some body other than CIE should run a particular line. For example, there is no reason Aer Rianta could not fund and run a line to the airport. That happens in many other capital cities. However, this Bill rules that out. I have no problem with CIE getting on with this project but it is silly and short-sighted not to include such an amendment. My amendment was ruled out of order but I call on the Minister to propose an amendment along these lines on Report Stage to allow for the future possibility of a Government deciding that someone other than CIE would run it.
Amendments Nos. 5 and 6 were defeated. One of them provided that the Minister shall not sign a light railway order until he publishes a detailed costing of any alternative way of doing the city centre section. I am disappointed that was not agreed to. It would have put an end to the debate on the cost of putting the city centre section underground. My amendment sought to stop the Minister signing an order until he published that information. It was defeated and I ask the Minister to introduce an amendment on Report Stage to cover that area.
The words "why CIE" seem to be the basis of many of the questions asked. We have all talked about the need for an integrated transport system in the capital city. Above all else that is what we need. The light rail, DART, buses and the Arrow in themselves are not a complete answer and never could be. Integration of all public transport modes will alleviate the appalling congestion in our city and surrounds.
CIE is the State company which runs the public transport system in Dublin. In the interests of integration and the expertise that exists it has been decided that CIE should be the company to which this order would apply. That does not preclude CIE entering into joint ventures or, together with a subsidiary, forming a management company of some kind to run the light rail. It goes without saying that the construction will be carried out by private sector firms on the basis of specific contracts awarded after Irish public sector and EU competitive tendering requirements have been observed. The unequivocal advice to us is that CIE should be the company——
Where does that come from? CIE?
No, it does not come from CIE. It comes from the DTI among many others. The advice is quite strong and unequivocal. CIE has the power under the Transport (Dublin Light Rail) (No. 2) Bill. Section 25 will empower CIE to form a subsidiary with the consent of the Minister and the Minister for Finance. A subsidiary so incorporated might with the consent of the Minister be authorised in its Articles and Memorandum of Association to form and take part in a joint venture company. There are many possibilities once the order is vested with CIE.
It does not mean that will be one of the three companies, which was another question asked by Deputy Brennan. No decision has been taken on which of these three companies or indeed any other subsidiary or joint venture or other structure shall run the show at the end of the day. That decision has not been taken.
Could it be the railway company?
No decision has been taken. Nothing has been ruled out. I do not know who it will be nor does anyone at this stage. It could be a new company under CIE. A fourth company — a light rail company -could be established to run it. Many options are being considered at present.
I was also asked if the light rail will cover its operating costs.
If no decision has been taken on who will to operate the system, to whom is the Luas office reporting? Which of the CIE companies will do the construction? Will it be the railway company?
CIE itself. The order is vested in CIE and the board itself.
So all the present operations including the so called consultation and construction is being done by the holding company at present.
Yes.
Is it the holding company or the Government that will decide which company runs it?
I am not sure. I would have to clarify that point.
Perhaps the Minister would clarify that. Could you finish answering the questions first?
The only outstanding question relates to the operating profit or loss and the publication of the results. An annual report will be published and I expect the details required by the Deputy will be included therein.
A preliminary analysis of the six options undertaken by the CIE project team shows that all of them would be able to cover their operating costs from fares, revenue and generate an operating surplus. However, the Tallaght-Dundrum option generated the highest operating surplus by a considerable margin of £5 million per annum compared to £4 million for its nearest competitor. The Tallaght-Dundrum option produced the highest patronage figures, generated the highest annual operating surplus and provided the greatest length of segregated track allowing the provision of fast and reliable services. This option also has the greatest route length which is reflected in the lowest cost per kilometre of the options examined.
In the case of options which incorporated a line to Ballymun the extensive on-street running involved in providing a line to Ballymun was a major negative factor. Patronage figures for the Ballymun option were also lower than patronage figures for Tallaght-Dundrum.
What is wrong with on-street? I thought the Minister was wildly in favour of that.
It is all on-street. We are talking about whether it is dedicated track as distinct from——
It seems to be more expensive when on-street.
Yes, it is too expensive because there is too much on-street.
Patronage figures for the Ballymun option were also lower than patronage figures for the Dundrum option giving rise to a lower annual operating surplus. The options considered were: Tallaght-Dundrum, Ballymun-Heuston, Sandyford-Whitehall, Broadstone-Tallaght, Ballymun-Tallaght, Whitehall-Fox and Geese, Dundrum-Finglas and Whitehall-Sandyford.
Does the Minister of State expect Luas to be in operating surplus before interest on the capital?
If the Deputy is an accountant, he will tell us. An operating surplus is clearly defined in accountancy terms.
We are examining of the annual accounts of a company that has not yet been formed. Avoid hypothetical questions, please.
It is most unusual that a venture of this kind should be proposed without any policy for the management of the company being included in the statute. In recent times bodies such as Coillte, Telecom Éireann and various semi-State bodies have had a requirement included in their founding statute that they must be self financing or operated on a commercial basis. Here we have a regression to a former system of simply authorising something to happen and then praying that it produces a surplus. The Minister of State said that the projected surplus on the Tallaght-Dundrum line is £5 million. On what turnover is that based?
That is a hypothetical question.
With the greatest of respect, the Minister of State blithely answers that there will be a £5 million surplus. When you ask her how she arrives at that she says that she does not know.
I did not. Let me answer the question.
Perhaps the Minister of State is being too generous in her reply.
I did not say that. Do not jump the gun. The analysis has been done. These figures come from that. It has been published and is available to the Deputy. The answers to those detailed questions are available to anybody who wishes to have them.
Question put and declared carried.