I welcome the Minister of State at the Department of Public Enterprise, Deputy Jacob, and his officials, and Mr. Brendan Tuohy, Secretary General of the Department, who is accompanied by Mr. John Fearon, Assistant Secretary, who chairs corporate services, and Mr. Derek McConnon from the finance unit.
Estimates for Public Services, 2001.
Vote 32 - Public Enterprise (Revised).
The purpose of the meeting is to consider the revised Estimates for 2001 for Vote 32 - Public Enterprise. I understand there are three versions of the revised Estimate, the latest of which was presented to the Dáil on 21 June and referred to the Select Committee on the same date. A suggested timetable has been circulated for the debate on these Estimates with opening statements by the Minister of State and Opposition spokespersons followed by a discussion by way of a question and answer session with reference to individual subheads. Is that agreed? Agreed. I invite the Minister for State to make his opening statement. If the select committee so agrees he can deliver the statement or consider it circulated.
I am very pleased to have the opportunity to attend this meeting of the Select Committee on Public Enterprise and Transport to discuss with the members the 2001 Estimates for my Department.
I am more than happy to deliver the opening statement, but perhaps members would prefer to have copies circulated.
It is a matter for the Minister of State. Personally I would waive the right to make an opening statement so we could get down to the business of questions.
I would like to outline to the committee an overview of the main policies and programmes which underpin the Department's Estimates for this year. These policies and programmes are formulated against the backdrop of the National Development Plan, 2000-2006, launched by the Government in October 1999.
I would like to deal first with public transport. The public transport Estimate for 2001 must be considered against the backdrop of the revitalisation of the national public transport system which the Government has embarked on and which was outlined in the national development plan. A key priority of my Department is the development and upgrading of our public transport system so that it provides a real alternative to the private car. It is evident that as a result of our prosperity and increased car ownership we have a growing problem of congestion in urban areas. Without a substantial investment programme designed to shift people away from the private car, journey times in urban areas will deteriorate further and the quality of life for all of us will suffer.
The national development plan and the DTO's "A Platform for Change" represent new planning and investment strategies which will guide public transport investment in the greater Dublin area in the years to come. Under the national development plan, a funding regime has been put in place to invest in public transport that was not there previously. The fruits of this investment can already be seen in terms of additional buses and DART and diesel rail cars.
Bus users in the greater Dublin area are benefiting from improved services, greater capacity and frequency as well as new and extended routes. The bus service is now proving to be a real alternative to the motor car for commuting into the city. At a national level there have also been major improvements in bus services in all the major urban areas and on rural routes. Intercity services have also been enhanced, with hourly services to and from the provincial cities and 15 minute services to Dublin at peak hours from the satellite towns such as Navan and Drogheda.
In an effort to address the many issues facing Iarnród Éireann in delivering the ambitious targets contained in the national development plan, a small top level group was appointed early this year and will assist Iarnród Éireann to face the challenges of expanding the rail network and delivering improved services to customers. The group is investigating the current industrial relations environment within the company and the challenges facing management, staff and unions to achieve maximum value for the customer and the taxpayer from the major investment programme in the rail system over the coming years. The group will also look at the current structures, procedures, processes and practices within the company at all levels for managing the changes necessary. It is expected the group will report before the end of the month. On the suburban rail network, the new carriages have provided much needed additional capacity while infrastructural work such as doubling of the Maynooth line and opening of the Grand Canal dock station provides more travelling choices to the commuter. This investment programme is set to continue and will transform the public transport system in Dublin and at a regional level. A number of major infrastructural projects, particularly on the rail side, are in the pipeline and a real task for CIE and Iarnród Éireann in particular is the delivery of the projects on time and within budget.
Following a review of the bus market in the greater Dublin area, the Government published a consultation paper last September entitled "A New Institutional and Regulatory Framework for Public Transport", now commonly referred to as "the Red Book". The publication of this policy paper is an important step in the revitalisation of our public transport system. The key proposals are to increase private sector involvement in public transport provision, introduce competition in the provision of public transport and establish an independent regulatory body or bodies. The proposed institutional and regulatory framework will be implemented in a spirit of partnership and openness. The Public Transport Partnership Forum, which includes the social partners, is to comment on these proposals during the summer. The Minister will finalise proposals on these matters following consideration of all the submissions received.
My Department and the Department of the Environment and Local Government in April jointly published a further consultative document, "New Institutional Arrangements for Land-Use and Transport in the Greater Dublin Area". This document proposes the establishment of a new strategic authority for the greater Dublin area which would, among other functions, act as a public transport regulator.
The key public transport regulatory functions proposed are designing and procuring a high quality public transport system, promoting an integrated public transport network, regulating fares and encouraging increased public transport use, identifying new bus routes and tendering for operators for them and implementing a range of detailed market regulatory powers. My Department will be responsible for preparing the sections of the legislation which will grant public transport regulatory functions to the authority. Following conclusion of the consultation phase at the end of June, it is intended that work on the necessary legislation will proceed with a view to seeking Government approval of the general scheme of the Bill in the autumn.
I am delighted to say there has been significant progress on the Luas project since last year and that it is on target for completion and commencement of services in 2003. The main construction contract, involving track laying and cabling, has been signed and work commenced recently. Preparatory physical works on lines A and B, including mainly utility divisions, are well advanced and in some cases completed. Construction of the depot and central control room at the Red Cow began in October 2000 and will be completed in July 2001. The 26 trams for operation on the Tallaght to Connolly Station line will be stabled at the depot. The first tram has been built and will be delivered in Dublin in October 2001. The remaining 40 trams ordered will be delivered at two trams per month from January 2002. The competition for the award of the operating contract is progressing and it is hoped the preferred candidate will be selected in the autumn.
The Government approved in principle the development of a metro for Dublin and the Light Rail Project Office - LRPO - has begun the necessary preparatory work. The tendering process for the first line will begin by the end of the year. The LRPO will be expanded and restructured and will become the railway procurement agency when the necessary legislation has been enacted. The metro will be delivered as a public private partnership. Progress to date on this project includes a public consultation process, commenced by the Light Rail Project Office which has met with an enthusiastic response; a market consultation exercise which has just been completed by my Department, with the responses received from a significant number of interested parties at home and around the world being assessed; and the LRPO development of route alignments and traffic modelling which is progressing. The Minister proposes to make a submission to the Government in the coming weeks in relation to the development of the metro with a view to allowing the procurement process to commence as quickly as possible.
The safety of our railways was of particular concern to the Minister when she came to office and has remained one of her priorities since then. In 1998, she commissioned independent consultants to carry out a wide ranging review of railway safety in Ireland, including the means by which railway safety is regulated.
In 1998, she commissioned independent consultants to carry out a wide ranging review of rail safety in Ireland, including the means by which railway safety is regulated. The report of the consultants gave two clear messages. First, substantial investment in Iarnród Éireann's infrastructure and safety management systems was urgently required to bring them to an acceptable standard. Second, that the existing regulatory framework for railway safety, based on legislation dating back to the 1840s, was inappropriate for modern circumstances and needed to be overhauled.
On receipt of the consultants' reports in 1998, the Minister immediately established a high level task force comprising representatives of the Department of Public Enterprise, the Department of Finance and CIE. The role of the task force was to draw up a prioritised safety investment and implementation programme to address the concerns expressed by the consultants. The railway safety programme 1999 to 2003 was subsequently agreed and approved by Government in March 1999. The programme provides for investment of £430 million over the five years of the programme. This comprises £379 million on infrastructural improvements and £51 million on improvements to Iarnród Éireann's internal safety management systems.
To the end of 2000, £176 million has been invested by the Exchequer in the programme. This has enabled Iarnród Éireann to complete a significant amount of upgrading to its infrastructure. In particular, a total of 172 miles of track has been renewed, 102 miles of fencing erected, 94 bridges have been renewed and 152 level crossings have been upgraded. In addition, there has been wide ranging improvements to Iarnród Éireann's safety management system. A further £102 million is provided in the Estimates this year for the continuance of the programme.
Since the original report was published in 1998, the Minister has commissioned the consultants to carry out two implementation reviews. The purpose of these reviews was twofold: first, to measure Iarnród Éireann's progress in implementing the railway safety programme and, second, to measure the degree to which Iarnród Éireann and the Department had implemented the recommendations made by the consultants in their original report. The first implementation review was published in March 2000 and the Minister forwarded a copy of it to each Member of the Oireachtas. The second implementation review has now been finalised by the consultants and the report is currently being considered in the Department. The Minister intends to submit the report to the Government shortly and to publish it immediately thereafter.
In parallel with the investment programme, new legislation is being developed to put in place a new regulatory framework for railway safety. This framework will apply to all railways to which the public has access, including the Iarnród Éireann network, light rail, metro and heritage railways. The principal feature of the new framework will be the establishment of an independent railway safety authority to regulate railway safety in Ireland. The new authority will have wide ranging powers of inspection, investigation and enforcement.
The proposed legislation will also introduce a "safety case" approach to railway safety in Ireland. A safety case can be broadly defined as a formal written document which sets out how a railway operator proposes to manage safety in all its activities, including the identification of risks arising from its activities and the measures put in place to mitigate and manage those risks. The legislation will place a general duty on railway operators to operate a safe railway and will require each operator to produce a safety case and to submit the safety case to the new authority.
The new legislation will also establish a railway safety advisory council whose functions will be to consider issues relevant to railway safety and to make recommendations, as appropriate, to the RSA or to the Minister. The membership of the advisory council will be drawn from representatives of the railway industry, railway unions, bodies representing the public interest, worker-public safety bodies, a body representing the mobility impaired and other experts in a particular field relevant to railway safety.
Earlier this year the Minister published a consultation document outlining her proposals for the new railway safety legislation. The responses to the consultation have been considered and she is now seeking the approval of the Government to proceed to the legal drafting stage. The Minister expects to have the legislation enacted by the end of 2001.
I would now like to outline some of the progress made in the road haulage industry. The road freight transport market continues to grow, despite the difficulties being encountered by hauliers faced with increased congestion on the roads and delays travelling in and out of the ports. Improvements are, however, on the way. Road transport remains the dominant mode of moving goods and products and is likely to remain so in the future. The report entitled "A Strategy for the Successful Development of the Irish Road Haulage Industry", published in 1999, identified the challenges facing the industry and made recommendations for addressing those challenges. More recently a task force for the road haulage industry was established by the Taoiseach to respond to serious difficulties facing the sector. The programme of action, which resulted from the work of the task force, has been published.
I would now like to talk about the air transport sector. In relation to Aer Lingus, the airline is going through a difficult trading period as a consequence of recent industrial relations difficulties which involved the suspension of services, the impact of the foot and mouth outbreak and the softening economic conditions, particularly in the important US market. These factors have delayed the implementation of the initial public offering of shares in Aer Lingus as authorised by the Government in December 1999. A further influence on the IPO timing is Aer Lingus's performance in 2001. I understand the abovementioned factors when combined with the significantly increased cost base as a result of recent pay settlements and higher fuel costs are likely to result in the airline moving into a loss for 2001, even if there is significant recovery in performance over the remainder of the year.
Against the background of these factors and their potential impact on the timing of an IPO, the Minister recently requested her advisers to look at alternative sale options for the airline, take soundings of interest from potential investors or buyers and to report back to her within a few weeks. It is too early to speculate on the outcome of the advisers' work. If, in her judgment and that of the Minister for Finance, alternative sale options are worth pursuing having regard to the report of the advisers and other relevant issues, a formal sale process will be implemented at the appropriate time which will be open and transparent. The enabling legislation will also come before Dáil Éireann to allow any transaction to be undertaken.
The Government remains convinced that, notwithstanding recent difficulties in Aer Lingus, privatisation offers the best long-term option for the airline as a small niche carrier in a very competitive market. There are no longer compelling economic reasons underlying State ownership of Aer Lingus. Availability of private sector capital is now far more widespread than when the airline was originally set up and there is no shortage of operators willing to take on commercially viable routes.
The Minister has apprised the Aer Lingus unions of these developments in recent discussions and agreement has been reached on the resumption of discussions with the unions on increasing the employee shareholding up to 14.9% of the company. These discussions resumed last Thursday, 21 June 2001.
Aer Rianta is proceeding apace with its major five year capital investment programme at the State airports covering the period 1999 to 2003. This programme amounts to in excess of £550 million over the five years. Last year saw the opening of the new terminal at Shannon, which brought passenger terminal capacity up to 4.5 million per annum, from 2.4 million previously. Dublin Airport's new passenger terminal extension has been in operation since last year bringing overall capacity up to 20 million passengers per annum. Work is, of course, continuing on the visual and physical integration of the old and new parts of the terminal building. Aer Rianta has a firm timetable for the phased completion of this work and the company anticipates that by January next the combined terminal facility will operate as a single seamless unit, which will provide a high quality of comfort and service to all airport users. While the work is progressing, there will inevitably be a degree of inconvenience to passengers but Aer Rianta will ensure that everything possible is done to keep inconvenience to a maximum.
The growing passenger traffic at Cork Airport has put pressure on the terminal building and the company expects building work to begin on a major extension of this facility by the end of this year. Overall, Aer Rianta expects to invest more than £60 million in capital development at Cork Airport.
The Minister remains committed to supporting the regional airports and regional access. The essential air services programme - PSO regime - has been considerably expanded with the addition of two new routes to Derry and Knock in January of this year and additional daily flights on the Kerry-Dublin and Galway-Dublin PSO routes. The annual budget to support the new PSO programme is in excess of £10 million compared to about £3.3 million in previous years.
My Department is currently assessing the proposals from the regional airports in relation to their spending plans for marketing and promotional activities and safety/security measures this year. The budget available to my Department for supporting these activities is £1.5 million and the Minister would hope to be in a position to inform the airports of their allocation from the fund in the coming weeks. In addition, a sum of £11 million was provided under the national development plan to assist the regional airports with infrastructural improvements and upgrades in facilities. Prior to Easter this year, my Department invited the airports to submit their proposals in relation to this funding and those proposals are now being examined and assessed. The regional airports represent an important element of the national transportation network and contribute to the drive for a more balanced regional economic development.
The Irish Aviation Authority is undertaking a major capital investment programme in which its air traffic control systems at Shannon, Dublin and Cork will be replaced. The bulk of this investment has been spent on the construction of a new air traffic control centre at Shannon. The construction phase has been completed and the centre will be officially opened next month.
The next step will be to commence equipping the new centre and re-equipping the centres in Dublin and Cork. It is expected that the new systems will be implemented on a phased basis over the period 2003 to 2005. The new centre at Shannon will also accommodate the authority's training centre. There is no financial draw down from the Exchequer arising from this project which will be funded by the Irish Aviation Authority from profits and borrowings. The full cost will be recouped over time by the authority from airlines through user charges.
The new air traffic control system will ensure that the authority has an open flexible system which is fully compliant with national and international requirements and is capable of enhancement in line with developments emerging from European air traffic management strategy being developed by Eurocontrol - the European organisation for air navigation safety - at the request of the European transport Ministers.
While Irish airspace continues to be safely and cost effectively regulated and managed, the picture in the skies over mainland Europe and the UK is not so positive. It is no exaggeration to describe the situation regarding delays and congestion of air traffic as approaching gridlock. This has been acknowledged within the aviation sector for some time now but until recently no coherent initiative existed to seriously tackle the problem. With the launch by Madame de Palacio, the EU Transport Commissioner, of the European single sky proposals we have finally started to confront the underlying problems affecting air traffic delays.
The Irish Aviation Authority has played an active part in the formulation of Ireland's policy response to this debate. The report of the high level task force established to examine this issue highlighted a recognition that the problem of delays can only be solved at European level and that a system of independent regulation also at European level across a range of functions, including safety and economic, must be introduced in order to facilitate the required improvements. Commission proposals arising from this report are expected shortly and will require careful consideration and analysis given that they will effectively be a blueprint for the future of air traffic management in Europe.
On Saturday, 26 May 2001, legal documents were signed in respect of the proposed transaction involving the disposal of the business and certain assets of the Irish National Petroleum Corporation to the Tosco Corporation, a major US refiner and marketer of oil products. It is envisaged that completion of the transaction will take place on 16 July next, subject to certain significant conditions being met in the interim, including the enactment of legislation.
The main assets involved in the proposed sale are the Whitegate refinery and the Whiddy Island oil terminal in Bantry Bay, which are operated by subsidiary companies of the INPC. A third subsidiary company, the National Oil Reserves Agency, which maintains Ireland's strategic oil reserves, is not included in the proposed deal and will continue to operate in the State sector.
Under the terms of the proposed transaction, Tosco will pay a gross consideration of US$100 million, although the net proceeds to the State will be substantially less after taking account of a number of factors, including the retention of INPC's existing debt and the costs associated with a proposed ESOP for the workforce. Most importantly, Tosco is undertaking to operate the refinery and the terminal for at least 15 years on a purely commercial basis, without the benefit of the mandatory regime or any other kind of artificial support, while maintaining existing jobs and conditions of employment. Since the State took over the refinery in 1982, Whitegate has had to depend on support under the mandatory regime which obliges oil companies to source - at a premium price - at least 20% of their white product requirements from Whitegate. As the mandatory regime must be renewed annually, it has never been possible to guarantee the continuation of operations and employment at the refinery from one year to the next.
The process of finding new arrangements for the discharge of INPC's commercial functions began early in 1999 when the Government, in sanctioning a major essential investment programme at the refinery, became convinced that a more robust financial basis would have to be found for the core refining business. The Government was especially concerned about the need for INPC to fund further investment programmes at the refinery in the future, beginning with the works likely to be necessary to meet Auto Oil II fuel emission specifications in 2005.
Responding to these concerns, INPC carried out an extensive search process which resulted in the submission of a number of serious bids. The company's detailed evaluation of the various proposals confirmed that the bid submitted by the Tosco Corporation was by far the most advantageous to the State in both financial and strategic terms and this conclusion was subsequently endorsed by the independent consultants engaged to advise the Ministers for Public Enterprise and Finance in the matter. Officials of the two Departments, with the assistance of expert advisers, have been closely involved in the negotiations in the interim to ensure that shareholder concerns were adequately addressed at all stages.
The proposed transaction as it now stands offers clear advantages for INPC, for the work force and for the economy generally. For as long as it has to operate as a small, stand alone facility, isolated from other more profitable areas of the oil business, Whitegate will always be at a disadvantage. The Tosco proposal, on the other hand, offers the benefits of integration into a major oil company, including economies of scale and a culture of development. For the employees, the deal offers the prospect, for the first time in two decades, of employment stability and career enhancement in the context of a major oil industry operation where continuous investment in both people and plant is a way of life. At the same time, Ireland retains an indigenous oil refining and terminalling capability on a sustainable commercial basis and at least cost to taxpayers and consumers.
The legislation necessary to empower the Minister for Public Enterprise to discharge key functions necessary to allow the proposed disposal to take place passed all Stages in the Dáil last week. The Bill in question is, I understand, scheduled for a Second Stage reading in the Seanad this Thursday with the remaining Stages due to be taken next week. I also understand that the result of a ballot of all INPC employees on the proposed transaction should be known, if not today, then in the very near future. I hope there will be a positive outcome to the ballot and to the Seanad's consideration of the Bill and that the transaction can proceed to completion in July as envisaged by the parties concerned.
The Irish energy market continues to grow and current indications are that growth in electricity demand will continue at an average annual rate of about 4.2% as the Irish economy continues to grow. Generation capacity is growing to respond to electricity demands and the Commission for Electricity Regulation is satisfied that there will be adequate capacity to meet the needs of electricity customers, given the availability of short-term generation for the coming winter 2001-02 period. The commission will continue to monitor the situation closely.
The generation adequacy statement 2001-2007, published in May this year by ESB National Grid, states that, in the medium term, the commissioning of a large scale generation plant projected for 2002 will lead to a significant improvement in generation adequacy. In the longer term, assuming a properly functioning market with adequate investor incentives, it states that there is no reason generation adequacy should not be maintained within standard from 2003 onwards. The transmission system capacity problems are being addressed. As part of the ESB's £2 billion capital expenditure programme on the transmission and distribution systems, £500 million will be spent on the transmission system by 2005. Infrastructure delivery will be subject to quarterly progress reports to the Government's infrastructure sub-committee.
The Commission for Electricity Regulation - CER - the independent electricity regulator, has been functioning since July 1999 and put in place detailed arrangements for competition in the electricity industry. It takes over from the ESB the key functions of licensing the generation and supply of electricity and the oversight of access to the transmission and distribution systems and related charges. The EU Electricity Directive was implemented through the Electricity Regulation Act, 1999, and the European Communities (Internal Market in Electricity) Regulations, 2000. The initial market opening target, as set down in the EU Electricity Directive, was surpassed by Ireland and approximately 31% of the market is open to competition, which equates to 400 or so eligible customers. The Government is committed to liberalising the electricity market and 40% will be opened in February 2002. This will allow consumers of around 1 giga watt hour per annum, about 1,400 final customers, to be eligible to source electricity from independent suppliers. The market will be fully liberalised in February 2005 in line with the EU Commission's objective to secure full liberalisation of both gas and electricity markets. A new independent statutory company, EirGrid, was formally incorporated in February last and will soon take over the functions of the independent transmission system operator. The market for "green" electricity has been fully liberalised since February 2000 and the market for combined heat and power - CHP - electricity fully liberalised since 17 April this year. CHP reduces the environmental impact of energy use through the simultaneous generation of electricity and usable heat from the same plant.
The partial opening of the market since February 2000 has been successful with over 50% of eligible customers moving to licensed suppliers and almost 6,000 customers to green suppliers. There has also been considerable trading across the Northern Ireland interconnector. In order to open the market, players, other than the ESB, were facilitated to compete in the short-term. Provision was made in the tripartite agreement between my Department, the ESB management and unions for an early auction of significant ESB capacity to facilitate such access to the market. These auctions facilitate competition in the supply of electricity in advance of independent power plants coming on stream.
In pursuance of the energy policy objectives of security of supply, fuel diversity, environmental protection and the use of indigenous energy sources, the ESB, as public electricity supplier, will be obliged to provide certain public services. Subject to EU Commission approval and a ministerial order, the CER will be responsible for overseeing the imposition of public service obligations on the ESB in the interests of security of supply - peat stations - and environmental protection - renewable and sustainable generation.
In the gas sector, Bord Gáis Éireann has submitted applications to my Department for three major pipeline projects - the Dublin-Galway-Limerick ringmain, the Mayo-Galway pipeline, which will enable the transportation of Corrib gas, and the second Scotland to Ireland interconnector. These applications are being processed in the light of the gas Acts. The Corrib partners, Enterprise Energy, Marathon and Statoil, announced their decision to bring gas from the Corrib field to market. Due to delays, the gas will not flow commercially before summer 2003.
At its meeting of 27 February, the Government decided that the gas network should be extended to the north-west. Bord Gáis commissioned a study to examine the options and costs of this and I expect to see this soon. The extension will require significant external funding and grant aid raises state aid and competition issues on which my officials are in dialogue with the EU Commission.
An announcement in October 2000 set out the intention of establishing independent regulation of the gas sector. In this context, the Gas (Interim) (Regulation) Bill, 2001, establishes the Commission for Electricity Regulation as regulator of the gas sector, primarily through the transfer of existing powers and functions to it. The commission would then be renamed the Commission for Energy Regulation. The Bill is an interim measure to deal with the issue of my conflicting roles as a shareholder and regulator within the shortest possible time frame. Later we will introduce further legislative proposals based on a broader re-evaluation of regulation in the sector, taking into account the results of a public consultation and any issues raised by the recently published draft EU directive on the internal energy market. The Bill was approved for publication by the Government and I hope to present it in the Seanad before the summer recess.
BGE and Questar, an American pipeline company, have made an application to the Northern Ireland regulator to build two pipelines - east west from Belfast to Derry, to serve the proposed gas fired power station at Coolkeeragh, and south north from Gormanston to Belfast. Negotiations between these companies and the Northern Ireland authorities are ongoing.
In relation to nuclear safety and radiological protection matters, £2.080 million has been provided in my Department's Vote for 2001 as a grant-in-aid to the Radiological Protection Institute of Ireland to cover the net cost of its day to day operations. The institute is responsible for regulating, inter alia, the custody and use ofradioactive substances and irradiating equipment and for monitoring levels of radioactivity in the environment, including the marine. These activities are aimed at protecting the public from the hazards of ionising radiation, whether originating here or abroad. It also plays an important role in supporting the Government’s ongoing and committed campaign against the UK’s Sellafield operations. My Department’s Vote in 2001 includes £29,000 set aside to provide financial aid to County Louth residents towards the cost of scientific research being undertaken by them in their independent legal proceedings against BNFL. In 1997, the Government approved financial assistance of £400,000 towards the cost of scientific research projects being undertaken by the residents, of which almost £200,000 has been paid to date.
An amount of £1.059 million has been allocated in my Department's Vote in 2001 for the implementation of the radon grant scheme. The scheme, approved in principle by the Government on 7 September 2000, will assist householders to undertake radon remediation measures in their homes and will commence in the latter half of 2001. My Department's Vote also contains an allocation of £100,000 to test the national emergency plan for nuclear accidents, which is due to be conducted later in the year by a team of consultants.
Details of the most ambitious programme for renewable energy ever in Ireland, the alternative energy requirement competition - AER 5 - were announced in May 2001. AER 5 is designed to secure the construction and operation of an additional 255 MWs of renewable energy based electricity generating plant from wind, hydro and biomass at an estimated cost of £200 million. This will treble the amount of electricity generated from new renewable sources and assist Ireland in meeting its obligations under the Kyoto Protocol by reducing C02 emissions from electricity generation. This will effectively treble the amount of electricity generated from new renewable sources and will assist Ireland in meeting its obligations under the Kyoto protocol by reducing C02 emissions from electricity generation.
I am currently engaged in the legislative process to establish the Irish Energy Centre as a statutory body in its own right, under the auspices of the Minister for Public Enterprise. The Bill to effect this change was published as the Sustainable Energy Bill, 2001, on 10 April 2001. This Bill passed all Stages in the Seanad on 23 May and we are currently awaiting confirmation of dates for remaining Stages in the Dáil. The IEC is to be renamed the Sustainable Energy Authority of Ireland with the working title of Sustainable Energy Ireland. This is a further stage in the implementation of the Green Paper and will allow the centre to play an increased role in the Government's policy on renewable and sustainable energy, particularly in helping Ireland meet its commitments under the Kyoto protocolumn I appointed an interim board for the IEC, under the chairmanship of Professor Frank Convery, and it held its first meeting in December 2000. The principal mandate for this interim board is to oversee the transposition from Enterprise Ireland to a statutory body.
The strategic importance of information society issues to the continued development of Ireland both socially and economically is very significant. The Irish Government is taking steps with regard to legislation and infrastructure to ensure that Ireland is strategically positioned for the 21st century. Under the national development plan £147 million is allocated to support the provision of advanced communications and e-commerce infrastructure and services in less developed areas of Ireland to assist the development of the information society. Two thirds of this allocation will be made in the BMW region. The expenditure for the year 2001 in this regard will be £14.8 million.
The first call for project proposals to receive grant assistance under the NDP issued in June 2000. Funding to nine projects of £44 million was announced in January 2001. These projects involve five different companies in the deployment of broadband infrastructure using a range of technologies in all parts of the country. These projects are scheduled to be completed by the end of 2002. The principal rationale for investment in advanced communications infrastructure and services under the NDP lies in the need for more balanced regional development and filling the services and infrastructure gaps that the market is failing to provide.
In addition to the timeliness and regional development rationale for public intervention, there are other societal issues to consider. Citizens can be disadvantaged in the information society by means of their socio-economic circumstances as much as by their location. Therefore, the e-commerce and communications measure also has the objective of enhancing social inclusion in the information society and increasing access to public services electronically.
The community application of information technology - CAIT - initiative is intended to fund demonstration projects which encourage and assist those in our society who are unfamiliar with, and who do not use, the new information and communications technologies in their everyday lives. These demonstration projects will be undertaken by the community and voluntary sector with assistance from the public and private sectors. Over £4 million has been provided for this purpose over the period July 2001 to December 2002.
In excess of 450 proposals were received by the deadline, which expired on 15 February last. An independent steering group containing representatives of a number of Departments and the private sector has considered all these applications and has recommended 71 projects for funding. The recommended projects impact on every county in Ireland and a wide range of groups such as the elderly, the unemployed, manual workers, the Traveller community, people with disabilities and young people at risk. The CAIT initiative is just one of many initiatives being undertaken as part of a wider Government programme to ensure a fully inclusive information society in Ireland.
If Ireland is to become a key European and global centre for advanced applications and international collaboration as well as advanced network based research, Ireland's broadband research infrastructure must be developed to a stage where it is on a par or better than our European and international competitors. Expenditure in this area will lead to a ten-fold increase in telecommunications capacity between the Irish, European and US research networks by September 2001, allowing Ireland's researchers to participate in cutting edge science with their international colleagues.
The speed of change within the telecommunications sector is rapid and the arrival of faster, broadband Internet access is quickly approaching. Very small aperture terminal - VSAT - delivers a competitive platform for broadband communications using satellite terminals. It is easily installed, affordable and requires no phone line. VSAT is also the first wireless broadband technology making it especially appealing and practical for bringing connectivity to rural areas. This project aims to trial this technology in a number of rural areas thus helping to ensure that Ireland develops as a fully inclusive information society.
On 10 April 2001 the Government decided to transfer responsibility for the digital hub, the new location for digital content industries in the Liberties and Coombe area and MediaLab Europe, the third level research facility, projects to my Department. On foot of this decision, the Government made an order on 22 May last transferring responsibility for Digital Media Development Limited, the company mandated to develop the digital hub, to the Minister for Public Enterprise with effect from that date.
In addition to approving the transfer of the project to my Department, the Government also allocated additional funding to the digital hub project. The total allocation for multimedia developments approved by Government is £52 million. Since the Government decision, the Department of Finance has approved a further £3 million in capital funding, giving a total allocation of £55 million.
Finally, I would like to speak about the seabed survey. The first complete seabed survey of the Irish offshore territory was approved by Government decision of April 1999. The Geological Survey of Ireland, a technical agency of my Department, has responsibility for managing all aspects of this survey. The survey will involve using a variety of hydrographic, geological and geophysical techniques from specialist ships, the provision of the resulting data to clients and the exploitation of these data to maximise revenues and other major benefits to the State.
This first detailed knowledge of the whole Irish marine territory of some 900,000 square kilometres, ten times the national land area, is anticipated to yield very great benefits in relation to policy for the sustainable development of all our marine resources and the conservation of our marine environment. The total approved cost of the seabed survey is £20.7 million to be spent over seven years. The Estimates include a provision of £7.454 million this year.
Thank you, Minister. There were to be statements from spokespersons from Fine Gael, the Labour Party and the Green Party but they have agreed not to make statements as such. I will give each spokesperson priority in asking questions under the relevant subheads in the manner laid out. Is that agreed? Agreed.
I join the Chairm an in welcoming the Minister for State and his officials and I thank him for setting out so clearly the details of the ongoing work in the Department and the expenditure. It is a considerable Estimate, £568 million, and we are obviously dealing with some of the key components of the engine of the economy dealing with energy, transport and telecommunications. I have a question in relation to subhead A with regard to a growth area of the economy - consultancy. Consultancy has become an industry in itself. I notice that consultancy services have increased by 50%, up from £2.261 million to £3.4 million. What kind of consultancy work is involved here? Who got the work and how can the increase of 50% be explained?
The sheer scale of what is planned would certainly explain the substantial increase the Deputy has rightly pointed out. In terms of outlay on consultancy services, co-ordination work at Dublin Airport for the allocation of slots at community airports amounts to £22,000. Development of a policy for public-private partnership in light rail and metro——
Was the figure of £22,000 to do with the English company, SH and E?
Airports Co-Ordinated Limited are the consultants. The study of the capacity of Dublin Airport was undertaken by SH and E, at a cost of £52,300. Other examples are the development of a policy for the PPP in light rail and metro at a cost of approximately £1 million and the project management system for the public transport investment programme under the NDP. The railway safety audit cost approximately £250,000. The implementation of the regulatory reform in the bus sector and the technical guidance on the construction of the major new railway works are other examples. The public transport financial audits account for £100,000.
On the energy side, the proposed disposal of the INPC was in the order of £1 million. Advice on the construction of the second gas interconnector with Scotland was substantial. The test of the national emergency plan, which is generally welcomed, is also substantial and, with the restructuring of the electricity industry and transposition of the EU electricity directive, would probably be among the main projects. Another large project which I am sure the Deputy would endorse as being very important is the consultancy concerning the North-South energy interaction.
We are taking questions on subheads A1 to A 8.
I am interested in the consultancy expenditure.
That was a very comprehensive response.
I have my answer.
Will a copy of the consultancy study on regulatory reform in the bus sector be available to the committee? I am a new member of the committee but forgive me for thinking that there are conflicting directions coming from the Department on this issue. Initially the Department was gung-ho for a stand-alone bus regulation, but it now has reversed into a major land use agency for the entire greater Dublin area. It will take many years for that to be finally resolved. I would like to see details of the consultancy work that went into this because it might help clarify the debate on this issue.
The committee is interested in various aspects of bus transport and it would be helpful if we could study the thinking behind the changeover from purely looking at the regulation of buses to the wider issue. The buses seem to be a subset of the overall issue raised by land use in the greater Dublin area.
The direction taken by the Government is different from that proposed in a consultancy report that this committee received in the past, before my time. We would like to be able to evaluate those conflicting arguments.
That report has yet to be completed. The Department has a policy of putting all these reports on its website and they are readily available. A few will not be available for commercial confidentiality or some such reason, but, in the main, the policy and practice is to put all this information on the Department's website. I believe that what the Deputy seeks is available on the website.
They are not there yet.
We have a list of completed consultancies and I assure the Deputy that these are on the website. They include the construction of the second gas interconnector with Scotland.
This is a small point but on subhead A6, is there a policy in the Department with regard to conserving energy? Is there a Departmental policy on the use of renewable energy in its own premises?
I must ask the Deputy to repeat the second question.
I know it is the policy of the Department to encourage the use of renewable energy. Is the Department using energy from renewable sources in its building? If not, is there a proposal to do so and is there a policy across Government sectors to lead the way in this area? The other side of that coin is energy conservation. Is there a written policy in that regard in the Department?
With regard to the Deputy's second question on renewable energy and conservation of energy, every incentive is being put in place to encourage State-owned buildings, non-commercial buildings and Departments to conserve and use renewable energy. I made an announcement on this subject last week in which I stated that £10 million was being advanced to encourage energy conservation measures to be installed in new buildings or in the expansion of existing buildings in the ownership of the State, Departments and non-commercial State bodies. That policy will continue to be followed. We are also training staff and extending the business management system to all buildings.
What use is made of renewable energy?
As a State, we are only now coming into our own in terms of renewable energy. By the year 2025, 12% of all electricity generated on this island will be by the renewable energy route. That is a very ambitious target. Somebody else in the Department may have taken the decisions by then.
It is not as ambitious as Denmark.
It may not be as good as what Denmark has achieved but, in the context of our starting point, we are more ambitious than most, particularly in relation to wind power. The 12% figure is very conservative, based on one megawatt coming from offshore. I am sure the Deputy will agree that offshore development is both desirable and viable, and it will happen. I believe that by 2005 a considerable percentage of our electricity will be generated via the renewable route.
We will move on to subhead C 122(b)(viii).
Following the direction signalled by Deputy Staunton in relation to energy conservation, this is an area in which we are falling far short of what needs to be done. The Estimate amounts to £6,110,000. Is there liaison or dialogue on energy conservation between the Department of Public Enterprise, the Department of the Environment and Local Government and local authorities with a view to making all buildings, including Government buildings, private domestic and commercial accommodation more energy efficient in terms of materials used, design and structure, including solar panels etc? While developments are taking place in relation to alternative energy, renewable sources and conventional production from combustible carbons, gas and oil, there does not appear to be very much happening in the area of energy conservation, which has enormous potential for savings to the economy. What is happening in terms of innovation, practical measures, liaison, dialogue and co-operation with the Department of the Environment and Local Government?
Two years ago, on 27 July 1999, the Minister of State announced the introduction of a grant scheme to mitigate the effects of radon. That scheme has not yet emerged and the Minister of State has again announced it today to apply in the second half of this year. The grant level is being pitched at £800, which is pitifully inadequate. The companies engaged in this work are quoting figures of £2,000 to £3,000, conservatively, for an effective radon remediation scheme. The cost is outside the range of many small income families who, through no fault of their own but simply due to an unfortunate geographic accident, find themselves in an area with a high level of radon. In those circumstances, there should be a 100% grant for radon mitigation measures.
In relation to Sellafield, I heard the Minister of State's radio interview earlier today. I fully endorse his scathing comments about BNFL and support the position he outlined in that regard.
I have a few similar points to make, but I will try to avoid repetition. The Minister of State mentioned an increase of 12% in energy conservation. Could we have a breakdown of that figure? Is that related to the Irish Energy Centre and the sustainable energy Bill, which is currently marking time? I regret that it has not been pushed forward. This matter deserves much greater priority than it is being given. The predictions in relation to climate change are becoming constantly more worrying, including one recent forecast of colder winters in the relatively near future. That has particular implications for elderly people and for children. We must take stock of our very poor record on energy conservation.
With reference to Deputy Higgins's query about the figure of £6.110 million, I notice that it is further broken down as £6.01 million and £100,000. I expect the Minister of State will comment further on it in his reply.
I share the views of Deputy Higgins on the poor performance on energy conservation and the fact that the focus has been on new buildings. Energy auditing of existing buildings is long overdue. Could the Department of Public Enterprise and the Department of the Environment and Local Government set a timescale within which energy auditing should be a requisite part of all building stock being assessed? In relation to radon, there is a similar need for grant aid for retro-fitting energy conservation measures, which should include solar panels where possible, as is done in the Netherlands. Is there any concrete development on that?
If we take our current GDP as £125 billion, our £6 million for energy conservation represents a proportion of less than 6 in 100,000, which illustrates the insignificant scale of our effort. In the context of repeated warnings of impending ecological disaster, which we read of every day in the media, how seriously is Government - and I am not singling out the present Government - taking this issue? Even the 12% increase which has been mentioned is still just a drop in the ocean. The attitude appears to be one of "growth and business as usual", with no real effort to break the link between energy consumption and economic growth except, perhaps, in a research department somewhere. Can we claim to be making any serious effort, by comparison with other countries which are leading the field in this regard?
Can the Minister of State give any information on the Kyoto situation? In the Dáil last week, it was referred to in terms of "emergency" or "disaster" or similar terms. What is our current position in that regard? If the Minister of State has not got the relevant figures immediately available, perhaps he will provide them at a later stage. While I welcome the 12% improvement in energy conservation which has been mentioned, I join Deputy Sargent in seeking details of concrete action in that area. Much of the expenditure seems to relate to the setting up of the Irish Energy Centre. Money should be allocated towards conservation, solar panels, insulation, education etc. I would support any action by the Minister of State in that regard. It is regrettable that the sustainable energy Bill will not, apparently, pass through the Oireachtas before the summer recess. It would, I understand, release funding to the new body being established, which could then be up and running by next autumn. As matters stand, it will not be in operation until near Christmas. We are losing very valuable time. I have no doubt that all parties would facilitate the passage of this important legislation.
Is there liaison with the Department that deals with natural resources, including forestry and the carbon sinks aspect?
The Irish Energy Centre was common to many of the questions from Members. I am also anxious to have the Bill passed and we have been pressing strongly to have it taken, but the available time in the House is limited. As colleagues will be aware, the Bill has completed all Stages in the Seanad and, hopefully, we may at least get to Second Stage in the Dáil before the recess. In the meantime, I wish to emphasise that the work which the centre, in its new format, can do is already up and running, in terms of leading this process which colleagues have rightly articulated in this debate. In anticipation of possible delay in getting the legislation through, I put an interim board in place. I was very fortunate to get an excellent chairman and an excellent board of very capable and willing people to get on with the job, pending the enactment of the legislation. They are preparing the programme of work and have got over a lot of staff difficulties. The establishment of the interim board, the publication of the Green Paper, which was very well received, and the fact that it was backed up by an allocation of £146 million in funding, all helped to deal with a morale situation which had been a problem. That agency, in its new format, can do an excellent job.
The funding which has been provided is for promotional work and to assist the Irish Energy Centre and, in its new format, Sustainable Ireland, to spearhead the thrust of this effort. That money will also act as a lever to secure other money to encourage, exhort, educate and support research and development. The Irish Energy Centre is to be complimented on the excellent work it has been doing in this area up to now. The scale of operation is now far greater. We have the funding to do what needs to be done. I agree that energy conservation is hugely important. The steps which I have outlined needed to be taken, starting with the policy, as set out in the Green Paper, together with the funding and a body to lead the assault, namely the Irish Energy Centre. The requisite elements have been put in place and I am confident the new body will get on with the job.
Deputy Sargent referred to solar energy. My understanding is that further development of the technology is required before it is an attractive proposition in Irish conditions. I would dearly like to see a variety of renewable sources being used and it is already happening on a small scale. The immediate concentration is on wind energy, which is deemed to be the most promising option by virtue of our climatic conditions.
Deputy Richard Bruton will take over the Chair in my absence for a short time.
I will move on to the radon question. Personally, I would have liked to introduce the grant scheme much sooner. I am glad to be in a position to introduce it now and to announce that the funding has been provided for that purpose. I am not sure that the costings quoted by Deputy Higgins are entirely correct. Other types of material which are currently under examination may prove to be more economical, but I cannot be definite about this just yet. Our inquiries in that regard are ongoing. The scheme which we have put in place will be an incentive to people. When it is formally announced very shortly, we will have a public information exercise to exhort and encourage people to avail of the grant, to have tests done and to carry out the necessary remediation work to their homes. Considerable work has already been done in relation to schools, as indeed it should be.
With regard to Kyoto, the Department of the Environment and Local Government is the Department spearheading this country's activity in that regard in meeting the commitments to which we have signed up. The Deputy is right in saying that we are sadly lagging behind at present. If we were to continue on a "business as usual" basis, we would be in dire straits. As I heard Deputy Sargent remind the Dáil on at least one occasion, it could well cost the Exchequer, in addition to environmental considerations. My Department is addressing the matter, as I have already outlined, through the content of the Green Paper, the work of the Irish Energy Centre and by promoting renewable energy. In the context of energy conservation, we have to look far beyond the domestic housing sector. The transport and industrial sectors have to be dealt with capably, expeditiously and comprehensively. I know that colleagues are interested in the concept of combined heat and power, CHP, technology. The recent Electricity (Amendment) Bill was a positive move in that direction. That sector, which was restricted heretofore, is now fully liberalised. That is an acknowledgement of the importance we attach to the technology itself. Companies, institutions and people who have put in place state-of-the-art CHP facilities are to be congratulated. Regrettably, the economics of CHP have changed, due to the sustained increase in the price of gas. However, I am convinced that, in the longer term, this is the right direction to go, wherever possible.
How many farms are involved in the farm electrification grant scheme? Under subhead B8, what is the policy for the continued ownership of the grid by the ESB while giving control to Eirgrid?
There were 700 applications this year under the farm electrification grant scheme. Of those, 560 have been approved so far. With regard to Eirgrid, it is a complex matter. The arrangement is in compliance with an EU directive that the functions be separated. Licences have issued under the European Community's internal market regulation 2000. The Commission for Electricity Regulation has issued the following licences. The transmission system operator licence provides that Eirgrid will operate and ensure the maintenance of, and if necessary develop, a safe, secure, reliable, economical and efficient electricity transmission system. The second licence, the transmission system owner licence, provides that the ESB shall, as asset owner, maintain the transmission system and carry out construction work in accordance with the development plan prepared by Eirgrid, using its own resources and outsourcing. The third licence is the distribution system operator licence, which provides that the ESB shall, as distribution system operator, operate and ensure the maintenance of, and develop as necessary, a safe, secure, reliable, economical and efficient electricity distribution system.
I regret to have to stop the discussion at this point. We have well exceeded the time allocated to energy. May I suggest, for next year, that activity levels be provided in the explanatory documentation. It would be helpful to have information such as the number of people availing of grants or the number of passengers in terms of the £60 million subsidy. Deputies could then get a better idea of activity and performance, as well as cash levels. That would make for a more useful debate.
We will move on to road and rail transport - C1 to C7.
This is a huge section. Subhead C2 relates to funding for rural transport initiatives. Will the Minister of State give some idea of what is involved under this very general heading? To what precisely does it refer?
I will try to deal with this important issue in the short time available to me. It is of great interest to many people in my constituency. I note that public transport projects are down by 35%, as presented in C2. The Minister of State mentioned that he is updating legislation from the 1840s. Is there Government commitment to improve the track capacity from the 1840s? Essentially, the Dublin to Belfast line is still a two track system, albeit repaired, maintained and patched up, involving radical investment. Given the enormous increase in projected capacity on that line, is there anything envisaged beyond the rail safety type projects, repair and replacement etc? In relation to the Rail Safety Advisory Council which the Minister of State mentioned, could that function as a rail users' group as well as an advisory group to the Minister? It sounds more like an official Dublin bureaucracy than an involvement of bodies representing the public interest, as mentioned by the Minister of State in his introduction. Do rail users come under that heading? Rail users' groups exist but they are not being resourced in any respect except perhaps with goodwill. Accordingly, they are not able to respond to the expectations placed on them. Will the Minister of State beef up the Rail Safety Advisory Council and make it a rail users' group with a broader remit?
The figure for the DART interest charge is fascinating. Each year, £4.7 million is paid out as DART interest charges. Can surpluses not be used to eliminate those charges, or have the banks got some hold over us?
I apologise for having to leave, which meant that I missed the early part of Deputy Sargent's comments. It is good to see Luas becoming a reality. We all breathed a sigh of relief when we saw the Minister availing of the photo opportunity to position herself behind the tiller of the first locomotive which is to arrive. She is never a lady to miss a photo opportunity, but at least seeing is believing.
In the absence of the procurement agency legislation that has gone through the Seanad, I understand that line B from Sandyford to St. Stephen's Green cannot go ahead. Can the Minister of State please confirm that? He said "Preparatory physical works on lines A and B, including mainly utility divisions, are well advanced and in some cases completed". However line B, which was to go ahead, will not go ahead unless we can get this Bill through next week and we would be obliging in that regard.
Plans for the metro are very general. We have seen all kinds of moveable feasts in relation to the target date for it. What is the latest estimate or guess?
We are all extremely perturbed about the mini-CTC project which is now the subject of an inquiry by a sub-committee of the Joint Committee on Public Enterprise and Transport. Everything is suspended. What was to have been a project, albeit shoe-horned, with an artificially low limit of £14 million is now going to cost conservatively £50 million. Not one of the 28 stations on the four lines in question has yet been connected to a modern network safety system.
The railway safety programme may have to acknowledge that this is the first time there has been a decent injection of cash and £430 million over the five years is extremely welcome. However, I note with some disquiet that there have been some cutbacks on the fringes and we are not even half way through the year. For example, four miles has already been chopped off the Dublin to Westport line and there are cutbacks on the Sligo and Tralee lines. Every mile of track that is not proceeded with equates to £900,000. One would imagine that this would be proceeding apace and if there are cutbacks at this stage, only halfway through the year, it is a matter for concern. The renewal of the railway track is extremely welcome. However, as I argued with Barry Kenny on RTE recently, the standard of rail service is pitifully inadequate. I use a train as much as possible but I cannot use it from the point of view of reliability and the length of time it takes - five hours from Dublin to Westport. One would be in Boston in the time it takes to get from one side of the country to the other.
The 51st State.
They are late, slow and uncomfortable. Some of the locomotives date back to the 1960s, not to mention the rolling stock, which is antediluvian. It is totally inadequate and unfortunately very little seems to be happening to replace either the locomotives or the rolling stock. We certainly welcome the improvement in the DART service, but the mainline service is pitifully inadequate. There is no trolley service on the trains most of the time and the dining car, when it is open, is very often crowded with passengers because of overcrowding in the other wagons. If it is possible to get a seat in the dining car, very often no food is being served or the standard is pitifully inadequate.
The service for people in wheelchairs is intolerable. On the Dublin to Westport line, wheelchair users have to sit in the dining car directly under the one telephone on the train. That is not good enough.
I welcome the rail safety audit. We talk about the industrial relations problems in Aer Lingus; we have major industrial relations problems within CIE and Iarnród Éireann in particular. I ask the Minister of State to outline the instruction that last week went from congress to the ILDA people who joined a third union, in this case the ATGWU. Are they going back to SIPTU? Until that boil is lanced, we will have ongoing problems. We do not want another summer of paralysis on the rail lines and simmering discontent in the company leading to disruption of rail services.
Until we get an adequate rail service in place, people will be forced into their cars. I disagree with the increases last week. Imposing increases at a time when services are deteriorating is simply not on. It is all calculated to drive more commuters off the trains and back on to the overcrowded and over-polluted road system.
Before I bring in the Minister, I would like to pose a few questions myself. Doubling the subvention to Dublin Bus from £29 million to £60 million is welcome. However, bus users do not see where the extra £31 million is going. How was this increase in subvention determined in terms of ensuring the Exchequer is paying for an improved quality of service rather than losses that do not turn into better passenger satisfaction? It is a remarkable increase. I would like to see hard information like the additional passenger numbers to show what we are getting for the extra subvention. I know the bus lanes have been coming in, but sadly at a deplorably slow pace and it really is very unsatisfactory.
To be parochial on rail safety, in my constituency, the East Wall Bridge was struck and is now unusable. The consequence is that all heavy goods vehicles are being diverted from their normal exit from the port on the north side with huge consequent disruption to traffic across the north side. I was amazed to discover that because there is no budget available to it, Iarnród Éireann is reporting it cannot undertake the emergency repair to this bridge and it does not envisage anything being done until the first quarter of next year. That will be one year after the bridge closed and with an expected completion time of eight months this means following a major accident, it will take 18 months to repair a facility simply for budgetary reasons and not because Iarnród Éireann cannot get suitably qualified people to do the work. It seems extraordinary that at a time when we are all trying to encourage better use of the transport infrastructure in the city and reduce congestion, here there is a self-made congestion not being addressed.
I know we are talking about rolling out massive capital expenditure projects. It would be interesting if the Minister could send information to the committee on how expenditure on these is regularly monitored against budget and corrective action taken where projects are seen to be going over budget. The mini-CTC was hardly an example of good management in this instance and I am sure it is not typical as it is an unusual area, but it would be good to see the system of monitoring set out. I know that best practice has been established by the Department of Finance at some stage in the past. At a time when we are pushing all the buttons on expenditure, it would be good to see that we have a tight hold on costs.
What is the selection and timing of the north side Luas route? There is obviously considerable competition for the precise route. Bearing in mind the huge volumes that are generated at Dublin Airport, many feel that it should get priority. What time scale can we expect on that particular route?
I will endeavour, in my response, to do justice to the probing questions which colleagues have asked. Deputy Stanton referred to the rural transport initiative under subhead C2. Most of the expenditure under this subhead this year will fund the initial phase of the rural transport initiative. It will fund a number of pilot rural transport projects over the next two years and it is hoped to launch the initiative on 2 July. The rural transport initiative is designed to encourage the emergence of public transport services in rural areas, provided by community led organisations. It was developed in conjunction with the rural transport sub-committee of the public transport partnership forum. Earlier this year, the Department issued a consultation document on the initiative to which there were over 70 responses. The initiative will be administered by Area Development Management Limited on behalf of the Department and its primary objective is to promote and support the development of innovative community based public transport projects.
Deputy Sargent referred to plans to increase the number of tracks and expand capacity. There are some instances of that happening. The capacity of the Maynooth line to Hazelhatch has been quadrupled and there are studies afoot for other lines to be similarly treated. We are very much aware of that requirement. With regard to rail users, the transport forum was established under the PPF and the Rail Safety Bill will be before the Oireacthas later this year. With regard to the Rail Procurement Agency, the Transport (Rail Infrastructure) Bill, which was published last March, passed all Stages in the Seanad on 24 May. Its main provision is the establishment of an independent commercial statutory public body, the Railway Procurement Agency. That body will be responsible for the procurement of light rail and metro infrastructure projects through a number of means, including public/private partnerships. The Bill also provides for a single statutory railway order procedure for the approval of all new railway and the regulation of light railways, when running.
Will that body be available for cross-examination by this Oireachtas committee?
It will be a statutory agency and, accordingly, can be called before an Oireachtas committee, particularly this committee. In addition, the agency will be the contracting authority for the operation of LUAS, with the contract scheduled to be signed with the successful operator later this year. The signing of that contract will allow for commissioning and training to start so that the operation of the system can begin in 2003. It is hoped that the Bill will pass Second Stage in the Dáil before the summer recess.
Deputy Jim Higgins was concerned that Luas lines A, B and C might not be capable of going ahead. I am advised that they can go ahead because the light rail office can sign the contracts. With regard to the mini-CTC, I understand this is before this committee in September and perhaps we should not pre-empt that discussion. On rail safety, the project is being given priority in respect of return on investment. The work programme is also subject to staff availability and contract resources, but it is expected that the agreed programme will be fully implemented.
Deputy Bruton took a parochial approach. I always advocate that colleagues take that approach and I try to do so myself whenever I dare. With regard to the East Wall bridge, Iarnród Éireann, as quoted by Deputy Bruton, has said it does not have the money. The primary responsibility in this regard rests with Iarnród Éireann. There is an annual independent audit by IRMS. The company itself must decide on priorities, based on the IRMS findings and their own safety assessments. It would be quite appropriate for the Department to convey Deputy Bruton's strong comments directly to the company and that will happen.
The difficulty for Iarnród Éireann is that it is a £17 million repair job and that will not be found in petty cash. That is the nub of the problem. The budget for the existing safety programme was fully committed and another £17 million is difficult to accommodate.
The message will be conveyed and I hope it will have the desired results.
On public transport accessibility issues, Iarnród Éireann has established a disability users group to advise on accessibility matters. The group comprises regular rail users, all of whom have a mobility impairment. It has also appointed a mobility impaired liaison officer whose function is to co-ordinate the implementation of accessibility policy as well as providing assistance to disabled and mobility impaired passengers. The company has also published a guide for mobility impaired customers which provides information on accessible facilities at railway stations and has circulated a training document to all Iarnród Éireann staff on how to assist customers who have a mobility impairment. Both documents were written with the assistance of the disability users group, as was suggested.
With regard to the question about rolling stock, the current commuter DART and Arrow rail services are wheelchair accessible over most of the network. The latest DART and Arrow railcars also have audio-visual facilities which provide for announcements of the upcoming rail station for the visually and aurally impaired. All Dublin-Belfast enterprise trains are fully accessible and have accessible toilets. There is a designated wheelchair area in two carriages of each train set. Iarnród Éireann has approximately 220 other carriages of varying manufacture. A number of these are completely inaccessible and, where these are being used, the company has recently given a commitment to find alternative means of transport for wheelchair bound passengers wishing to use the service.
The dining carriage of each accessible train set has a dedicated space for one wheelchair user and, where advance notice of group travel is received, seats can be removed to create additional space. There are ongoing programmes for the introduction of induction loops at ticket offices for the aurally impaired; for the introduction and upgrading of tactile flooring at stations and for the provision of ramps and lifts to improve platform accessibility.
There was an inquiry into the ILDA situation. This is primarily a matter between ILDA and ICTU and should not require Government involvement. The importance of not having disputes this year is agreed. ILDA and ICTU should sort out their differences.
On the question of bus services, the NDP recognises that an improved bus service must be at the core of any short-term strategy to address traffic congestion. The strategy is designed to improve the quality, reliability, frequency and speed of bus services during the lifetime of the NDP. Some £220 million will be invested in the bus network in Dublin and surrounding counties. Dublin Bus has already received 225 new buses under the NDP to provide new and additional services in the Dublin area. Some 100 of these are replacement buses while 125 are additional to the existing fleet. These buses have increased capacity and frequency of services during peak hours. A further 56 new buses have been ordered this year to replace older buses in the existing fleet, and to improve quality and reliability. All new buses ordered this year and last year are low floor and wheelchair accessible.
Regional public transport is addressed through investment in improved services in major urban areas and in the upgrading of regional bus services. Some £12 million is provided for services outside the five main cities. The overall investment package will provide 450 new buses to upgrade Bus Éireann's rural transport fleet and provide 110 new buses to upgrade fleets in Cork, Limerick, Galway and Waterford. Bus Éireann took delivery of 148 new buses in 2000. Over 40 of these have been used to expand services in the greater Dublin area. The purchase of new buses has allowed Bus Éireann to increase peak capacity by 40% on all main corridors into Dublin. Bus Éireann plans under the NDP to provide high frequency services for all the main radial routes into Dublin with buses leaving every 15 minutes during peak times and every 30 minutes at off-peak times from towns such as Navan and Drogheda. A further 36 buses will be purchased by Bus Éireann in 2001 to enhance services in the greater Dublin area.
A regeneration of public transport services is taking place in Cork, Limerick, Galway and Waterford. Last year, 86 new buses were introduced in the provincial cities and 20 were purchased for rural services. Thirty of those buses were allocated to Cork city, nine of those being additional buses; 15 were allocated to Limerick city, including seven additional; 15 were allocated to Galway, including eight additional and six were allocated to Waterford city, including three additional. A new bus station is currently under construction in Athlone and Bus Áras is undergoing a major refurbishment programme.
Suburban rail development in Dublin is being undertaken by two distinct means. There is a short-term strategy and a long-term development programme. The short-term strategy is clearly focused on maximising the use which can be made of the existing suburban rail network. This includes the provision of 46 extra DART cars and 58 extra suburban rail cars, a range of signalling and infrastructure works, the lengthening of station platforms to cater for eight-car trains and the opening of a number of new stations.
On the current subsidy to Dublin Bus, what are we getting for the extra £30 million subsidy this year in terms of extra passengers and extra services? It seems a significant increase and I am not sure that it is adequately reflected in improved services.
The Estimates can be passed on to the Deputy.
The largest single Estimate that we are considering concerns the public service provision payments to CIE of £159 million. It would be useful to have a breakdown of that figure to see where exactly the money is going.
It is in the documentation concerning rail services which are being cut from £100 million to £83 million. Dublin Bus is up.
Is there any area where CIE is making money from its operations? Are efforts being made to make it more profitable or is CIE to be run on non-commercial lines? On the public transport investment programme, there is a figure of £65 million in the NDP for Dublin and the regions. There is no breakdown of that figure. Where is that money going and how is it divided? Some £65 million is a substantial amount of money.
Bus Éireann's long distance buses are breaking even. Some Dublin Bus services are commercially viable. The breakdown that the Deputy seeks is as follows: rolling stock and refurbishment came to £1 million; DART cars came to £4.25 million; diesel rail car work came to £0.3 million; city centre signalling and crossovers came to £3.5 million in respect of preliminary design work; the Kildare to Connolly Station upgrade came to £3.6 million in respect of geo-technical work; new station work came to £2.5 million; Dublin Bus fleet replacement came to £5.9 million for 56 new buses of which 12 are mini-buses and 44 are double-deck; a radio system for Dublin Bus came to £2.4 million; Bus Éireann received £4.55 million for fleet replacement and development and has 70 buses sanctioned awaiting final confirmation of the number of buses that can be purchased by the end of the year; and Bus Áras development came to £2.6 million.
When will we see an integrated ticketing system for rail and bus services? At present, we have a ridiculous system where one ticket cannot be used between different services.
That is a pertinent question. There will be a pilot scheme up and running in the first quarter of next year. Full details of this will be available on the website.
Has the area been selected for the pilot scheme? How is the £159 million to CIE determined? Is that a matching amount?
The breakdown is a matter for the company.
I see that, but how is the overall total determined? Is it a matching of its revenues?
It happens in conjunction with the Department of Finance, where it is discussed. As a result of the discussions, a figure is agreed, taking into consideration particular circumstances and public service obligations.
It is a parochial issue.
I note that the expansion of rail services in the Cork area has been promised. Is any money in this Estimate earmarked for such expansion? If so, how much? For what purposes will it be given?
The question of integrated ticketing was raised.
The Minister of State said that a pilot programme would begin in the spring.
I wish to give a little more detail. A committee chaired by the Department of Public Enterprise, including representatives of Dublin Bus, CIE, Iarnród Éireann, the LRT project team and the DTO, was established in 1998. Its objective was to prepare proposals for an integrated fares and ticketing system to encourage the best use of the network of routes and to facilitate those who make more than one trip in order to complete a journey. A more elaborate answer is available, but I will not take up the committee's time.
Are we getting an answer to Deputy Stanton's question?
Yes. I congratulate the Deputy for including the parochial once more. There have been a number of meetings on the Cork Strategy 2001-2020. The Department is very impressed by the Cork strategy. As a result of the meeting, it is hoped to take a proposal to Government based on the fact that the Department is impressed with what has been done.
I have to go to a meeting shortly, so perhaps Deputy Martin Brady will chair the committee then. Are there any questions on the Vote for aviation?
I understand a recent report by an international aviation authority was not very complimentary as regards Dublin. Deputy Jim Higgins asked me to mention the report, although I am not familiar with all the details.
The treatment of Aer Lingus pensioners is of interest to Deputy Brady, many of whose constituents are worried. The pensioners have not seen the increases in pensions that others have enjoyed and have fallen well behind as a result. They expected their issues to be resolved as a result of Aer Lingus' move towards initial public offering. The Minister for Public Enterprise initially indicated support for the pensioners in the Dáil, but her position hardened when she said the State will not play a role in restoring the pension fund to a level equal to other public service pensions. Relations between retired aviation workers and the Department seem to have broken down, I suspect under duress from the Department of Finance. The State owes loyalty to those who created Aer Lingus, an asset which may now be sold.
Perhaps I will deal with the Chair's question about pensioners before returning to Deputy Stanton's query. The Retired Aviation Staff Association - RASA - initiated a campaign almost two years ago on behalf of Aer Lingus and Aer Rianta pensioners. The campaign seeks salary indexed pensions backdated to 1989. Against the backdrop of the proposals of Aer Lingus and Aer Rianta to establish new schemes and their response to the concerns of RASA, the association revised its proposal for enhanced entitlements. The revised proposals involve the making of additional annual payments by Aer Lingus and Aer Rianta into the pension fund for the purpose of increasing pension payments to the same level as would apply to serving staff on the basis of current pay levels. In reply to a parliamentary question on 20 June, the Minister for Public Enterprise indicated that she was referring the pensioners' claim to the Minister for Finance.
Recent practice has been to provide pension increases in line with the consumer price index. These increases are not guaranteed and are not explicitly funded as they depend on the performance of the pension fund. According to the task force report, the cost of applying salary indexed pensions to members of the Irish airlines' general employee superannuation scheme is £399 million for past service and increased employer contribution of 6.3% is needed for future service. Aer Lingus estimates that a capital injection of £265 million into the scheme fund will be required. Salary indexed pensions were provided for all members of the scheme and future contributions will also be increased.
Aer Lingus has proposed to establish a new pensions scheme for pensioners and employees in the context of the initial public offering. Under the proposed new scheme, Aer Lingus is prepared to guarantee pension increases in line with the CPI, provided such increases do not exceed 5%. It is also proposed to make a small enhancement to pensions paid between 1982 and 1987 to reflect the fact that such pension payments were not in line with the CPI during that period. Aer Lingus does not propose to provide pension increases in line with salary movements as ongoing costs mean that a capital injection into the fund would be required. Aer Lingus has advised that the overall terms of the proposed new scheme will be in line with private sector practice where there are better benefits in many cases. Aer Lingus is one of the few commercial State companies that has operated in a competitive market for over ten years, so regard for private sector practice in relation to pension benefits is clearly relevant.
Is it correct to say that existing employees will receive not only the better pension deal, but 15% of the company? Retired air sector workers will not receive anything from the IPO, which is why there is a sense of injustice.
The Minister of State's comments seem to recommend that we wait until the initial public offering takes place, after which something can be offered. That is unacceptable as a similar situation was experienced with another organisation. As Deputy Richard Bruton rightly pointed out, this is an ongoing saga. Representatives of the pensioners have been to the House, including the committees, for 12 or 18 months, so the failure to resolve the matter is becoming a little frustrating for all concerned. We have to complain, be up-front and tell these people sooner rather than later that they are either going to be sorted out or that there is nothing for them. What I get is that there is nothing in the pot for them at the moment. Is that correct?
That is clearly correct because this has been left entirely to Aer Lingus.
It is not going to happen in that arena.
They have to buy the shares as the Acting Chairman says. I was sitting in the Dáil last week when parliamentary questions were being answered. The salient point is that the Minister for Public Enterprise, Deputy O'Rourke, undertook to refer the issue to the Minister for Finance. That is where the responsibility for pensions lies.
I would not like to rely on that.
The ESOP is a different issue and does not apply to pensioners directly. I would not confuse the issue with that. Am I right in saying that? The unions buy those shares. They are not appropriate to pensioners in any semi-State or State organisation.
The existing employees get 5% free and pay for the remaining 10%.
However, pensioners do not.
Pensioners get nothing. That is what heightens the sense of unfairness.
That is not unusual.
ESOP legislation does not allow that. As has been said, 9.9% must be purchased by the staff.
Deputy Stanton refers to a report which shows the Irish Aviation Authority in a bad light.
I seek clarification as to what it actually means.
We are not au fait with that report. If there was a report it would have been an independent one we could not influence. The Irish Aviation Authority is highly thought of as an excellent safety oriented organisation with an aviation and air traffic control record that is second to none. That is evinced by the fact that two years ago it was presented with an award by their peers around the world which recognised its professionalism and competence. I will certainly talk to the Deputy again if we hear of anything.
We might be at cross purposes. My colleague Deputy Jim Higgins asked me to mention this as he had to leave, for which he apologises. The international aviation monitoring group was talking about Dublin Airport. That is something the Minister of State can come back to me on at a later stage.
I would be happy to talk to the Deputy or to hear from him again. It is a statutory requirement that an independent audit of the IAA be held once every three years and that appears in our Estimates. The independent safety audit in 2000 was very positive.
If there are any questions on subheads E and F, we should also agree those before we move on.
I have a question on subhead D8 referring to the fees and expenses related to the shares in Aer Lingus. The Government is talking about authorising the Minister for Public Enterprise to initiate a process leading to an IPO of shares in Aer Lingus. Is that a firm decision and is the IPO going ahead? The matter is very fuzzy here.
I am not going to take any chances with this one. I want to be able to give the Deputy an accurate and categorical answer. A Government decision on 14 December 1999 authorised the Minister for Public Enterprise to initiate a process leading to an initial public offering of shares in Aer Lingus. The decision to privatise Aer Lingus was heavily influenced by the need to position the company to ensure that it is capable of competing effectively in an increasingly competitive marketplace and that it continues to service Ireland's main markets in the UK, Europe and the United States of America. It was also necessary to address the company's significant funding requirement going forward. Following the Government's decision the necessary advisers to facilitate the implementation of the transaction were engaged. The Aer Lingus Bill, 2000, to provide the logistical framework for the IPO, was published and passed through Seanad Éireann last summer. The industrial relations problems which continued into 2001 combined with prevailing market conditions have resulted in a delay in the implementation of the IPO. In addition, the company's performance in 2001 will be seriously affected by the impact of the industrial unrest on services, the foot and mouth outbreak and softening economic conditions, particularly in the important transatlantic market. These factors, when combined with the significantly increased cost base as a result of recent pay settlements and higher fuel costs, are likely to result in the airline making a loss for 2001 even if there is significant recovery in performance over the remainder of the year. Other European airlines are experiencing difficulties as a result of these factors and many have reported a downturn in their operations.
It is against this background and having regard to its potential impact on the timing of an IPO that the Minister recently requested her advisers to examine alternative sale options for the airline. She also requested them to take soundings of interest from potential investors or buyers and to report back to her within a few weeks. On receipt of that report the Minister will carefully consider the options available and the advisers' conclusions. If, in her view and that of the Minister for Finance, alternative sale options are worth pursuing a formal sale process will be implemented at the appropriate time. The process will be open and transparent. The enabling legislation will come before the Dáil to allow any transaction to be undertaken.
Is the trade sale still on the table?
Yes it is.
The impression given in the House was that it was not. That was how the confusion arose. Are there are any further questions?
I thank the Minister of State for dealing so well with the questions of the committee. I also thank his officials for their courtesy. I reiterate my earlier statement that the consideration of the Estimates would be significantly enhanced if we had more information on the individual subheads. Considering this year's Estimates halfway through the year is a sorry testament to the way in which we do our business. That is not, however, the responsibility of the Minister of State.
I thank the Chairman for presiding over our business this afternoon and the other incumbents of that important chair during this session. I also thank my colleagues around the table for the courtesy they have shown and the questions they put to us.