SELECT COMMITTEE ON THE ENVIRONMENT, TRANSPORT, CULTURE AND THE GAELTACHT (Select Sub-Committee on Transport, Tourism and Sport) debate -
Tuesday, 12 Jul 2011

Vote 32 - Department of Transport, Tourism and Sport (Revised)

Chairman

This meeting has been convened to allow the committee to consider the Revised Estimates for the Department of Transport, Tourism and Sport - Vote 32. I welcome the Minister for Transport, Tourism and Sport, Deputy Varadkar, and his officials and thank them for their attendance.

I remind members that the former Minister for Finance requested that the Estimates debates should have a particular focus on the outputs to be achieved and the moneys being Voted. In our considerations today, we should examine what has been achieved and not just what the money is being spent on; both issues are important. We have a duty to establish that moneys are being allocated and spent wisely and prudently, but it is also essential that we be fully aware of the results that it is hoped will be achieved and the impact of these results on the provision of services throughout Ireland.

I propose to begin with an opening statement by the Minister followed by opening statements from other committee members. I will call on Deputies Daly, Stanley and Kenny in that order. Is that agreed? Agreed.

Minister for Transport, Tourism and Sport (Deputy Leo Varadkar)

At the outset, I might introduce my colleagues. They are Ms Doreen Kearney, principal officer, Mr. John Murphy, Assistant Secretary General, Mr. Fintan Towey, finance officer, and Ms Kathleen Morrissey, assistant principal officer in our finance section. I thank the committee for its meeting this morning with the CIE chairpersons. I managed to catch the start and finish of it and it seemed to go well. One might say the chairpersons were well scrutinised. I hope it does not put off future chairpersons but they did quite well overall.

I thank the members of the committee for allowing me this opportunity to present the 2011 Revised Estimate for the Department of Transport, Tourism and Sport for their consideration. The gross expenditure provision for my Department in 2011 is €2.357 billion, that is, €1.5 billion for capital projects and €855 million for current spending. The increase in the provision from €2.119 billion reflects the transfer of responsibilities for tourism and sport into my Department. Overall, my Department will spend 21% less in 2011 than it did in 2010, representing a cut of €636 million in one year. It is fair to say that the Department has taken more than its fair share of the cuts in the year gone by.

I set out some details of the major programmes falling under my responsibility. I will deal first with public transport and smarter travel. The public transport investment programme provides funding for the development of public transport infrastructure and the improvement of railway safety. The €370 million provided this year for investment in public transport will maintain high safety standards and seek to derive maximum value from the significant investment made in public transport in recent years.

Spending is in three principal areas. The first area is public transport projects. This is managed by my Department and includes funding for bus, rail and port accessibility projects, and for traffic management in the regional cities. The provision for this area this year is €16 million. The second area of expenditure is public transport safety and development. The provision of €138 million primarily covers the railway safety programme and also provides projects outside the greater Dublin area such as completion payments for the western rail corridor and for new rail rolling stock to be used on the outer Dublin commuter routes. The third area of expenditure is public transport infrastructure. The provision is €216 million to the National Transport Authority, NTA, and includes funding for projects in the greater Dublin area such as Luas, bus and rail projects, traffic management measures and bus priority as well as cycling and walking initiatives.

There has been progress in the development of public transport infrastructure and services over recent years and the following further improvements will come on stream shortly. Later this year and early next year additional train stations are expected to open at Hansfield on the Dunboyne line, at Oranmore on the Dublin-Galway line and at Crusheen on the western rail corridor. A park and ride facility will open at Carrickmines on the green line to Cherrywood in the autumn. Construction is expected to commence this year on the Marlborough Street Bridge, a bridge to connect Marlborough Street with Hawkins Street across the River Liffey dedicated to public transport, cycling and walking. Investment in bus priority will continue with the NTA providing funds for projects in Dublin and my Department funding projects in the regional cities of Cork, Limerick, Galway and Waterford. Real-time passenger information is already available at Dublin bus stops. Members may have noticed the LCD displays on many Dublin bus stops. They will continue to be rolled out during the rest of the year, providing bus passengers with access to real-time predicted arrival information for buses via electronic means. The system will also be rolled out to regional cities next year.

I understand that we are at last approaching a launch date for the integrated ticketing system, for which there is provision of €12.3 million this year. The systems behind the project are now undergoing final testing and the project remains on target to be rolled out on a progressive basis this year. The new leap card will allow flexible travel between different modes of transport that will mean real change for passengers.

I am providing €10.5 million this year for the accessibility programme which will improve wheelchair access to railway stations and bus stops around the country and provide signage at Dublin Port terminal buildings of particular assistance to those with visual impairments. The accessibility funding includes provision for the new scheme for wheelchair accessible taxis being run by the NTA. Funding of €5.5 million is being provided for 2011 for the development of bus lanes, green routes and other bus priority measures in the regional cities of Cork, Galway, Limerick and Waterford.

The committee will be aware that the Government recently announced a comprehensive review of capital spending which is now under way. The review will examine capital projects across all sectors of the economy to establish a set of priority projects and programmes that will support economic recovery and provide new employment opportunities. The results will form the basis of a new national development plan 2012 to 2016.

The provision of public service obligation, PSO, services by the CIE companies is subject to contract between the companies and the NTA. This year, €263 million has been allocated for public service obligation services. CIE faces a very severe financial position with a deficit of €53.6 million in 2010. Clearly, this is not sustainable. Despite our economic problems and the reduced sums available for capital and current expenditure, the Government will continue to prioritise the role of public transport. Unfortunately, the amount of money that my Department can make available to the NTA for PSO subvention will be reduced again. I expect the NTA to take a hard look at the scope and value for money of the PSO contracted public transport services in light of reduced resources.

Following my appointment as Minister, I engaged in consultations with the CIE companies and stressed the need to respond to the PSO subvention funding challenges through further cost savings in their activities. Cost cutting should take precedence over fare increases and service reductions but fare increases and service reductions will be inevitable if costs cannot be reduced sufficiently. I have also communicated this to the newly appointed chairs of the CIE companies.

The CIE group has implemented significant cost management measures, including the implementation of the Deloitte cost and efficiency review of Dublin Bus and Bus Éireann that included Dublin Bus's network direct project. Iarnród Éireann has also been successful in reducing its cost base to date. The CIE companies have been very effective to date in delivering such savings without having too adverse an impact on services. However, every year it will be a struggle to deliver the reduction in the PSO budget while maintaining services.

On the issue of smarter travel, a long-term - up to 2020 - sustainable transport and travel policy was adopted in 2009 which reflected the recognition that Ireland's transport trends are unsustainable, that is, if we continue as we are congestion will get worse, economic competitiveness will suffer, quality of life will deteriorate, emissions from the transport sector will continue to grow, and energy security will continue to make us vulnerable.

Traffic congestion in Irish towns and cities is for the most part caused by people travelling to work by car and driving their children to school. In the Dublin region, 100,000 people drive 4 km or less to work. An even starker statistic is that 45,000 people drive just 2 km or less to work.

In recognition of the fact that locally delivered smarter travel projects, which tend to be labour intensive, can provide a more immediate job creation impact than some of the larger infrastructure projects, €15 million has been reallocated this year within my Department to traffic management and smarter travel projects. That will create safer road junctions, better footpaths, improved bus networks and rail stations, and support new cycle schemes. Both the NTA and the national sustainable travel office will be involved in overseeing the funding of projects from the jobs initiative programmes.

Turning to the roads programme, Exchequer funding of approximately €13 billion has been invested in the national roads programme since 2001, with investment concentrated on the national primary network. To the end of 2010 the focus was on the completion of the five major inter-urban routes - Dublin to Belfast, Cork, Limerick, Galway and Waterford - together with the M50 upgrade and the Dublin Port tunnel. In addition, the M3, the Limerick tunnel and the Gort to Crusheen projects were also completed.

Following completion of the major inter-urban network the previous Government envisaged significantly reduced road investment with targeted investment in maintenance and network development. The financial allocations for roads reflected that, with capital and current expenditure significantly down on previous years. Future funding will be determined as part of the current and capital spending review which is now under way.

Provision must be made for the NRA's contractual commitments in regard to the PPP projects already completed. Investment in regional and local roads has also been reduced, along with that prevailing on national, primary and secondary roads. Additional funding was announced in June, however, under the Government's jobs initiative and will help deal with some of the worst damage inflicted during the flooding and snow of 2010 and 2011.

This year, local authorities have been allocated €10 million to assist with the cost of winter maintenance on regional and local roads. Waterford City Council has taken on the role of lead authority for the purpose of regional and local road salt contracts. A total of 210,000 tonnes of salt will be in stock in advance of this winter. A total of 80,000 tonnes are already in stock, and tenders have been published for the remaining 130,000 tonnes. Given that, we can probably expect quite a warm winter and the salt will no doubt go unused.

Deputy Seán Kenny

The Minister is an optimist.

Deputy Leo Varadkar

Perhaps we will find a cold country that we can sell it to and make it pay through the nose for it.

In light of the current financial circumstances facing the country no large road projects are currently scheduled to start after 2011, and the emphasis will be on maintaining existing assets and incremental improvement of the national and secondary routes to the extent possible within the budget.

To give members an idea of the figures, the NRA budget of €1.1 billion in 2010, will fall to €680 million in 2011 and is likely to fall further after that. When we consider the cost of maintaining and restoring the national roads, it leaves no money to start any new large road projects from 2012 onwards. Projects in construction in 2011 include the Longford bypass on the N5, the Cork southern ring road junction improvements, and the Belturbet bypass on the N3 which have already commenced.

In addition, the NRA expects to commence construction on at least four more significant projects with a strong safety focus as well as local and national impact. These are the Downs Grade separation project on the N4 around Mullingar, the Tralee bypass, a section of the N52 between Dalystown and Carrick Bridge as well as the Ballyconnell inner relief road on the N87.

It is also particularly important that there is continued commitment by local authorities to contribute from their own resources towards the cost of improving and maintaining the road network. On average, 32% of the total expenditure on regional and local roads in 2010 in county council areas came from local authority own resources. This will have to increase in the coming year or the roads will deteriorate.

In regard to road safety, I have provided in excess of €27 million under subhead B2 for the Road Safety Authority and the Medical Bureau of Road Safety in the 2011 Estimates. Road safety is a key priority for Government and this commitment is underpinned by the road safety strategy 2007-12. The primary aim of the strategy is to reduce road deaths to no more than 60 fatalities per million of population by the end of 2012 which equates to an average of 21 road deaths per month or 252 deaths per year. Thankfully, in 2009 and 2010, we succeeded in getting road fatalities below that level with an average of 20 and 18 fatalities per month, respectively. The emphasis now is on taking steps to consolidate the progress made. As Deputies will be aware, 2010 recorded the lowest number of road deaths since records began in the 1950s and I hope it will be lower than that in 2011.

I refer to the national vehicle driver file in Shannon. The online motor tax service, which is available through the national vehicle and driver file, continues to perform well. Arrangements are now at an advanced stage to enable 325,000 commercial vehicles avail of the service in instances where they are covered by a current roadworthiness certificate. This new service, which will result in more than 98% of vehicle owners being able to tax online, will be introduced in the coming weeks.

The procedures which are associated with taxing the remaining 2% of the vehicle fleet are complex and do not easily lend themselves to online applications but the Department will continue to examine and evaluate the possibility of assimilating these categories also into the online service.

I want to specifically mention the regional airports. I have already announced that additional funding is being made available for the six regional airports for 2011, reversing cuts made by the previous Government. This increased funding totalling €19.3 million will be used to cover operational and capital expenditure by the airports as well as the costs related to the PSO air services at the airports during the year.

However, from 2012 onwards, in view of the need to make the best use of scarce Exchequer resources, the Government has had to make the very difficult decision to focus its funding on four of the six regional airports, namely, Donegal, Ireland West at Knock, Kerry and Waterford airports. The aim is to ensure the efficient use of taxpayers' money so that Ireland has a sufficient network of regional airports to promote balanced regional development while taking into account significant improvements in road networks, shorter journey times by road and rail and the collapse in the number of passengers flying domestically. These four regional airports must now focus on putting in place realistic business plans for the future as Exchequer funding cannot be maintained at current levels. It is my desire that it be phased out altogether in due course.

In regard to Sligo and Galway airports, I would encourage them to use the opportunity provided by the additional funding this year to engage with various parties, including business interests, investors and local authorities, in order to secure their ongoing viability in some form.

I will now deal with the maritime aspects of my Department's Vote. A national ports policy statement was published for the first time in 2005. A public consultation on a review of this policy took place in 2010. It is intended to publish a revised ports policy document in the autumn. This will provide a policy framework for future decisions in regard to the structure and ownership of the sector.

The primary goal of a revised policy will be to ensure the State ports sector provides an efficient transport service in and out of the country for both goods and people. New port capacity will be needed in the medium to long-term, in particular to facilitate the trend toward larger ships. The revised ports policy should help facilitate optimum investment decisions in the future.

The 2011 capital Estimate of €5.65 million provides for payments in respect of necessary remedial works carried out at regional harbours to facilitate their transfer to the relevant local authority or port company. Work is ongoing to transfer four of the five remaining harbours to local authorities by the end of 2011 or early 2012. The Government's ports policy statement 2005 reiterated the view that most harbours would best achieve their potential through their transfer to local control.

The Irish Coast Guard, IRCG, has responsibility for Ireland's marine search and rescue functions and for marine pollution and salvage response in internationally agreed marine zones. The coast guard also has responsibility for inland waterways search and rescue. The provision in this year's Vote is more than €41 million. During 2010, the IRCG responded to 1,839 marine emergency incidents, a decrease of 54 over the 2009 figure. The total number of people saved or assisted was 3,570, up 443 on 2009.

The maintenance of the helicopter search and rescue service at Dublin, Waterford, Shannon and Sligo airports is estimated to cost €34.7 million in 2011. This includes the next milestone payment for the new 2012 contract to correspond with the arrival of the new build S92 aircraft to Ireland by year-end. The coast guard is responsible for marine emergency management by having in place a national system to respond effectively to marine casualty incidents and marine oil spill-hazardous noxious substances pollution incidents. Preparedness and response includes marine casualty and oil spill response plans, stockpiling spill response equipment and carrying out a programme of training and exercise.

My Department's maritime safety policy division is the State's regulatory authority for maritime safety. The main focus is on accident prevention through an appropriate combination of regulation, a heightening of safety awareness and enforcement. Ireland and the United Kingdom operate an integrated system for the provision of marine aids to navigation. This arrangement facilitates both states' meeting their respective international obligations under the United Nations Safety of Life at Sea or SOLAS Convention.

The Commissioners of Irish Lights, CIL, are responsible for Ireland's aids to navigation. Last December, the UK Transport Minister, Mike Penning, concluded an agreement with my predecessor, Noel Dempsey, whereby the former Minister committed to a process aimed at facilitating CIL to become self-financing for its activities in this State with the expectation of reaching that objective by 2016. Officials from the two transport Departments and representatives of the UK and Irish lighthouse authorities are considering proposals aimed at increasing Irish light dues income in the coming years. The maritime sector will be consulted in the matter before any changes are made to the current light dues regime.

I will now deal with the tourism issues. There is provision in 2011 for expenditure of more than €147 million on tourism services across a diverse range of activities. The tourism and hospitality sector continues to be a major economic force in the economy providing an estimated 180,000 jobs. It brings revenue to every part of the country and provides job opportunities for people across a range of skill levels. The estimate for expenditure by overseas visitors in 2010 is €2.7 billion. When carrier receipts are included, along with cross-Border visitors, this estimate rises to €3.4 billion. Estimated spending on domestic tourism in 2010 was €1.3 billion. Total spending on tourism in the national economy was €4.7 billion, including carrier receipts.

Early indications for tourism performance in 2011 are encouraging. Trips to Ireland for the first three months of 2011 were up by 8.6% compared with the corresponding period in 2010. There were 1,177,600 overseas visitors to Ireland during the three month period. I was particularly pleased to note a 7.2% increase in visitors from Great Britain which has seen falling numbers since 2008 and it yet remains our most important market. The figures for North America are up by almost 12% and this market remains crucial in terms of revenues.

The decision of the Minister for Finance to reduce the level of VAT applied to a range of labour-intensive tourism services to 9% provides a much needed support to this sector of the economy by improving still further the competitiveness of our services for tourists, in particular accommodation and restaurants. It also signals the Government's commitment to improving competitiveness.

The Government is also helping businesses to enhance their competitiveness in the international tourism marketplace by significantly reducing the cost of employing people by halving employers' PRSI for those on modest wages. I urge businesses to respond to these opportunities and to continue their efforts to make sure that tourists get value for money.

The jobs initiative fulfils the programme for Government commitments on overseas access by a three-pronged plan to promote inbound tourism as follows: abolishing the travel tax, conditional on clear commitments by airlines to increase inbound capacity from our source markets; the offer by the Dublin Airport Authority of significant rebates on passenger charges for extra passengers brought in by airlines; and more targeted co-operative marketing of new routes from key source tourism markets by Tourism Ireland, the DAA and the airlines to encourage more tourists to fly into Ireland.

By maintaining and rebuilding levels of access to and from overseas markets, we can help tourism play its part in the export-led recovery which will secure our long-term economic future. I was particularly pleased to join the Taoiseach, the Tánaiste and the Minister for Justice, Equality and Defence in launching the visa waiver scheme, which is perhaps the most radical change in Irish immigration policy or practice since the coming of the single market. This measure, along with the other steps in the jobs initiative, shows that the Government is serious about doing everything it can to support the tourism sector.

Chairman

A vote has been called in the Chamber and we need to suspend for it. I propose that we suspend after the Minister finishes this section and we can go on to the sports section later.

Deputy Leo Varadkar

Fine. The tourism and marketing fund has provision for more than €41 million this year to maintain our investment in core overseas marketing of Ireland, and this will enable Tourism Ireland to implement fully its 2011 marketing plans. As well as the direct investment in advertising and marketing, it is estimated that Tourism Ireland's general overseas publicity campaign this year will generate positive media coverage for the island worth up to €200 million in equivalent.

The Government's commitment to tourism, clearly demonstrated in the jobs initiative, creates the conditions for Irish tourism to build on the signs of recovery that are now becoming apparent.

Sitting suspended at 5 p.m. and resumed at 5.15 p.m.

Deputy Leo Varadkar

Under the sports capital programme, funding is allocated towards the provision of sports facilities at national, regional and local level. The programme is a primary vehicle for promoting the development of sports and recreational facilities in Ireland. It has transformed the sports landscape in Ireland, with improved facilities in virtually every village, town and city. The facility's fund ranges from new equipment for the smallest clubs to regional multi-sport centres and national centres of sporting excellence. Over 7,400 projects providing a range of essential sports facilities have benefited from sports capital funding since 1998, bringing the total allocation in that time to over €739 million. The grants continue to play a pivotal role in ensuring the provision of modern and high quality facilities around Ireland that attract more people to participate in sports activities. No new round of the programme has been advertised since 2008, but the programme is still active, with €33 million drawn down in 2011 to fund existing allocations. I am looking at the options for a new programme within the current financial constraints, but no decision has been made about the timing of future rounds of the programme.

The local authority swimming pool programme is also administered by my Department. Grant aid of a maximum of €3.8 million is provided to local authorities to help them to meet the capital costs of new swimming pools or the refurbishment of existing pools. Since 2000, some 58 projects have been or are being dealt with under the local authority swimming pool programme. Some 46 of those projects have been completed. The other 12 projects are at various stages of the programme. The €6.65 million that has been allocated for 2011 will be sufficient to meet this year's commitments under the current round of the programme. The total expenditure of €145.83 million under the programme between 2000 and 2010 leveraged a total investment of €406 million in respect of 48 pools approved for a grant. Sport and physical activity have huge potential to contribute to the development of a healthier society. I want to ensure everyone is encouraged and given opportunities to participate in sport and to enjoy all the benefits sport can bring through the development of a healthy lifestyle.

At its meeting on Tuesday, 21 June last, the Government approved my proposal for the development of the national sports campus at Blanchardstown on an incremental basis. In particular, I have asked the National Sports Campus Development Authority to proceed with the development of a national indoor training arena, including an indoor track. I am acutely aware of the difficulty of securing capital funding from the Exchequer because of the financial difficulties facing the Government. Therefore, I have asked the campus authority to explore other avenues of funding such as philanthropy or the sale of some of its land. I intend to update and publish the five-year national sports facilities strategy in the coming months to prioritise areas for future investment and grant assistance at national, regional and local levels. I commend the Estimate to the sub-committee. I will be happy to take questions from members.

Chairman

I thank the Minister. Before I call speakers to make their opening statements, I would like to give them some information about particular subheads on which they may wish to comment specifically. Subheads A1 to A8 relate to administration. Subheads B1 to B4 relate to roads. Subheads C1 to C3 relate to public transport. Subheads D1 to D4 relate to civil aviation. Subhead E1 relates to maritime administration and the Irish Coast Guard. Subheads F1 to F3 relate to miscellaneous areas of expenditure. Subheads G1 to G5 relate to tourism services. Subheads H1 to H6 relate to sport and recreation services. Subhead I relates to appropriations-in-aid.

Deputy Clare Daly

I am new to this process. Is the Chairman saying we must discuss the expenditure proposals under the headings he has listed?

Chairman

I read the list as a means of advising members where they might locate particular items.

Deputy Clare Daly

We can ask questions about them.

Chairman

They can be found under specific headings. In general, members can say what they like.

Deputy Clare Daly

I do not have a clue. I have no barometer by which to judge how these committees work. I will ask a few questions and we will see how we get on. The scale of the responsibilities under this brief makes it quite difficult to know where to start. The fact that there are so many subheads shows that this select group has a huge task. I would like to focus on a couple of things. The Minister referred to the review of capital projects that has been commissioned and the new national development plan that is being drawn up. Is the full scale of the planned capital expenditure defined in this document? Are we due to see another cut? Will another budget that governs capital funding in this area be announced? Is this it in its entirety? If so, how does it fit in with the overall review of capital projects that is being undertaken by the Minister? The sum of money provided in this area has already taken an enormous hit of 21%, or €500 million. People will probably be happy to see the back of certain projects, or happy to see others frozen. People will be really distressed about other worthy causes, however. I refer to the likes of the metro north project. Is there another source of funding for the project? Will it come in under another heading? It is not mentioned here. I am not sure whether we should read more into that.

A report has indicated that CIE has a deficit of more than €50 million, which is a huge hole in its operation. By giving the company a reduced amount of money to spend, we are asking it to square a circle. There seems to be a contradiction between the Minister's statement about prioritising public transport and his announcement of a further cut in the CIE subvention at a time when it is already in a difficult position. When the Minister talks about CIE dealing with that through further cost savings and cost cutting, what exactly does he mean? We have a chicken and egg problem here. It is clear that the ongoing cutbacks in the service are making it less attractive and deterring people from using it. That gives an impetus to further fare increases, which in turn deters more people from using public transport. What plans could the Minister put in place to cut across that?

I would like to ask another couple of questions. I do not know if the sub-committee would like to hear them all now.

Chairman

I will let the Deputy back in later in the meeting.

Deputy Clare Daly

I will ask a final question on roads. Is the amount of money we will spend under public private partnerships for roads projects identified under a specific subhead? How much money is the State paying to deal with the public private partnership element of tolls on national routes? Does the amount of money the State is paying in that regard show up under any subhead?

Deputy Dessie Ellis

One of the big issues I would like to raise is the Dublin Bus subvention, which seems to be decreasing each year. That is not sustainable when one considers the cutbacks that are being made. I do not know whether this can be re-examined at some stage. I am worried that we are taking bus routes out of local areas and putting them onto main thoroughfares. This is having a huge effect on communities, on wheelchair users and on people who find it difficult to access buses. The Minister has set out the amount of money that is available. I really think it needs to be looked at again.

We have yet to be told which of the many proposed capital projects will go ahead. I refer particularly to four projects on which I have challenged the Minister previously. Metro north is one of them. Has the possibility of getting money through public private partnerships, which are often mentioned by people, been ruled out? Metro north was originally meant to be developed by a public private partnership, with capital being injected. Have we reconsidered the costs involved? An absolutely huge sum of money - €150 million - has already been spent on metro north. If we were to scrap every capital project or postpone it until the long-term future, it would be detrimental to everyone. Public transport projects create many jobs, take many cars off the road and have positive effects on the various routes and areas that are served.

It was previously suggested that metro north would cost approximately €3 billion, but costs have decreased significantly in recent times. If we want to create jobs, we have to invest in capital projects. Some of the other projects that are being followed up on relate to road improvements and the ticketing service. It is welcome that €12.5 million is being provided for integrated ticketing because it is long overdue.

Deputy Leo Varadkar

I will start by talking about the capital projects. I should say that these Estimates relate to 2011 only. They set out the moneys we are allocating for 2011 and refer to how the outturn appears and compares with 2010. Decisions on the capital projects that will or will not go ahead in the future are subject to the outcome of the comprehensive spending review. Definitive answers will be provided when the new national development plan is published in September or October. The Department is working on various scenarios on the basis of its budget being cut by various amounts. It is obvious that the consequences for certain projects will differ if the overall budget is cut by 10%, 20% or 30%. We are not yet in a position to provide answers.

Deputy Ellis asked whether public private partnerships have been ruled out. They have not been ruled out. The National Roads Authority is pursuing public private partnerships for the combined Newlands Cross and Rathnew project and the Gort to Tuam project. The problem is that one has to think about what a public private partnership involves. It is not really private finance - it is a private company contributing to the cost of a project and getting the money back over 25 or 30 years, often making a considerable profit as a result. For a company to commit to lend the State or a State agency money which would be paid back over a 25 year period, it must have absolute confidence that the State has the capacity to pay back that money over the 25 year period. In the current context, when people are talking openly, and perhaps necessarily, about matters such as haircuts and burning bondholders - let us not forget, those who contribute to PPP are bondholders - discounts and rescheduling, needless to say there is no confidence in the PPP markets. As a result, it has not been possible to conclude any new PPPs in quite some time. Metro north and DART underground are entirely dependent on PPPs and if PPPs cannot be concluded, obviously, those projects cannot go ahead. Those projects need Exchequer funding as well. It will be clear when we complete the spending review whether that funding will be available. However, those projects require both. There is no way they can be funded entirely from Exchequer resources and both must be in place for either project to proceed.

The CIE deficit is €50 million. It is a slight improvement on the preceding year, where it was closer to €70 million. The deficit has been reduced. In fairness to the CIE companies, much as been done to bring their costs down.

I do not want to impose cuts next year. Public transport in Ireland is not particularly highly subsidised relative to other European countries. We do not have much choice. We are borrowing €18 billion, which is coming from the EU and the IMF. Those organisations will not keep paying these bills forever, nor can we expect them to. As a result, there will need to be further reductions next year.

The reductions can be achieved primarily through further cost savings in the CIE companies. If they cut their costs by 7% or 8%, that would be sufficient, there would be no need to cut back any services and there would be no need to increase fares at all. If cost savings of that scale cannot be achieved, then services will have to be cut and fares will have to be increased which is why I hope there will be political consensus on the need to cut costs rather than increase fares or cut services. Ultimately, it will be up to the companies, in co-operation with the Department and the NTA, to come up with those savings. That is the purpose of having State companies and them having their own boards, and so on.

Speakers mentioned funding spent already on projects that have been planned. Approximately €150 million has already been spent on metro north, €40 million on DART underground and the figure on Luas BXD, although I cannot remember the exact figure, is in the teens of millions. It is important for me, if it turns out that we cannot proceed with any of these projects, that the funding invested so far should not be wasted and we must set ourselves up in a position whereby we can turn those projects back on because they are good and value projects which are still part of the future vision that I and we all have for Dublin city. It is important that we finish off the planning process and get the railway orders for all three of those projects. It is important, within reasonable constraints, that enabling works are carried out to allow those projects to be turned back on if we find ourselves in two or three years, if the economy bounces back quicker than we thought and the markets reopen to us, in a position to do so quickly.

On tolling, €82.37 million is the figure for the unitary payments for the tolling PPPs. Was Deputy Daly's question more about the two projects where we are paying the companies because the traffic has not been adequate?

Deputy Clare Daly

Yes. How much is the Department paying to meet that shortfall?

Deputy Leo Varadkar

I am not sure of the exact figure. It is more than €100,000 a week.

Deputy Clare Daly

What was the overall figure the Minister gave?

Deputy Leo Varadkar

The €82.37 million is the unitary payments for building the roads that one must pay before the annual PPP money comes along. That is not for the tolling, but for the roads.

With the Waterford one and the M3 where the traffic volumes have not been as anticipated, the surplus from the M50 is being used to cover those payments. It comes from drivers, but it does not come out of my budget.

Deputy Paudie Coffey

Apologies for being late to the meeting.

The Minister is responsible for a combination of departments that were in a previous entity and that, in essence, are the arteries of the country - the roads, the transport networks, the ports, the harbours and the airports. Much of the infrastructure that will drive Ireland's recovery falls under his Department. The Minister is working hard to protect those arteries as much as possible.

I raise an issue that has been a bugbear of mine for some time, that is, the maintenance of county and local roads. I note the Minister has allocated €10 million this year for maintenance of that network. I appreciate there has been serious damage in the past year to the network due to weather conditions such as heavy flooding. There has been a serious reduction of outdoor staff in local authorities over several years. With that, there has been a loss of knowledge on the maintenance of gullies and drainage systems from those roads. Much funding is being spent on reinstating roads without putting the proper resources into maintaining the gullies and the drainage systems that come off those roads with the result that in the next flood or heavy rainfall, those same roads will be damaged again requiring more investment to resurface and fix the pot-holing and channelling that happens. The system here is reactive rather than proactive.

Even as a pilot project, will the Minister consider some kind of a geo-mapped system where every road is managed by the local authority but this goes back to a central asset management system similar to what happens with the ESB networks where each road is given a value and is seen as an asset? If that happens, and if every gully and drain on that roadway is maintained as it should be, and is recorded as such, each local authority will know when the road was last resurfaced and when the drains and gullies were last cleared. By doing that, the Minister will build up a maintenance record on all of those roads and will know what it costs to maintain them. While this might seem like a great deal of work, I would urge the Minister to do this through some initiative, even through taking on graduates through the internship programme or even encouraging local authorities to take them on. It would mean the Minister would increase savings over several years by building up this database of asset management. It is quite a basic idea but it is not being taken on.

At present, local authorities have an ad hoc system of maintenance where they react to the problem rather than being proactive. We have lost many excellent overseers who knew the lie of the land, the drainage and the farms and the land on which to leave the water in off the road. All of that is not happening any longer and roads are being damaged. The Minister then has local authorities on to him demanding funding to fix those roads. As a pilot project, at least, over a number of local authorities, the Minister should look at such an asset management system where we remove the problem before we make the investment. We would achieve savings in the long term if we did that.

Much of the jobs initiative and the Government's focus is on tourism. We will create jobs in that area if we can stimulate it. Access to the regions is important. I note the Minister mentioned the regional airport. There is an airport in my area in Waterford which is the access point for the south-east region and most of its business is tourism oriented. It is not like the other regional airports which are dependent on PSOs. Waterford airport is constantly trying to encourage tourism, and also business routes, which, I hope, will stimulate that region and simulate the economy. It is important we keep that in mind when funding regional airports.

The Minister has responsibilities for ports and harbours, although I note some of the harbours are becoming the responsibility of the local authorities. There is considerable potential in the tourism sector to exploit the potential of the estuaries, ports and harbours for sailing or the use of leisure craft. Emphasise needs to be placed on those areas as well. Even though ports are commercially minded and much work is being done to attract liners into them, the smaller leisure industry can be attracted to Ireland if some emphasis is put on those areas as well.

The Department controls many of the arteries of this country. The economic recovery will depend on its good decisions. I know the Minister is working hard on that.

Deputy Sandra McLellan

I also apologise for coming late. I have one question. Is there a budget committed to linking sport and suicide prevention?

Deputy Leo Varadkar

I will answer the last question first. There is no specific budget line of which I am aware on that matter. It is possible the Irish Sports Council funds something, but not of which I am aware. At Farmleigh House a couple of weeks ago I met my counterpart from Northern Ireland who raised this issue with me. We have agreed to explore doing something on an all-island basis in this regard. Although I may be wrong, I am not aware of specific funding. It is possible it comes from the Sports Council rather than directly from the Department.

As for Deputy Coffey's questions on the local and regional roads, I acknowledge his point. One of my major fears as Minister is that in three years' time, the roads will be in a bad state and there will be more potholes. My fear is that there may even be pothole candidates who will all point the finger at me. There is a significant backlog of repairs to the local and regional roads that in an ideal world would be done. I note that relative to a population of 4.5 million people, we have a great number of public roads. The €60 million provided in the jobs initiative will help a great deal but realistically that will not be available next year. It probably will be necessary to further reduce the budget for local and regional roads in the coming years, which will put more pressure on local authorities to come up with more money from their resources. They also are short of cash although I understand the Minister, Deputy Hogan, intends to give tax-raising powers to them in the near future. Consequently, it will be up to them to use those powers to get funds to repair the roads if they so wish.

I am sympathetic to Deputy Coffey's suggestion in respect of better management of the assets and my personal experience indicates there sometimes is a random element to road maintenance in that local authorities spot a few potholes or problems and then decide to put them on the list to be done for the following year. Perhaps the network can be managed more actively and more efficiently in the way that, for example, the ESB manages its network. That organisation would never go round looking to see which lines look a bit dodgy and then put them on the list for the following year. Some local authorities are better than others and the Deputy may be aware of the systems that operate within some local authorities that try to manage the network as efficiently as possible. In the course of my work I will meet representatives of the County and City Managers' Association. Moreover, this week I will meet not the Local Authority Members Association, LAMA, but the other group.

Deputy Paudie Coffey

AMAI, the Association of Municipal Authorities of Ireland.

Deputy Leo Varadkar

Yes, I will meet the other group as well this week. I intend to raise that issue with it and put it to the group that this budget line will be under pressure and that while it is all very well for it to approach me seeking more money, I wish to establish how well it will maintain the network with the money it receives.

I have visited Waterford Regional Airport twice since becoming Minister. I drove on both occasions but admittedly there are no flights from Dublin so I will not levy that one on the airport. On foot of support being removed from Sligo and Galway airports from next year, Waterford Airport certainly will be the most heavily subsidised airport in the State. I have made the point to its management that it must reduce its subvention over the coming years. As I have read a statement issued by Deputy Coffey that more or less stated the same thing, I believe the message that it must reduce its subvention or its demand for a subvention over the next few years has got across to its management. I appreciate that it is the only airport in the south east and its absence would leave Waterford very far from an airport. Again, however, money is limited and the airport must reduce that requirement as the years go by.

It is correct to state that there is great tourism and leisure potential for the harbours. However, the bodies that probably can do this best are local authorities rather than port companies, which is the reason many harbours have been transferred to local authorities. I am trying to set aside some money over the next couple of years to improve the harbours in advance of their transfer to local authorities in order that the local authorities will be willing to take them on and will be able to so do in a good state. I refer to harbours such as Bantry, Fenit and a few others, where it is hoped the local authorities will take over. Dún Laoghaire probably is the most tourism and leisure-orientated example of those which are under my remit. I was at its regatta over the weekend, which was really great, and many things can be done. Many ports now are developing master plans and are working tourism into them very strongly. In particular, the Dublin Port master plan does so by bringing the cruise ships up the port. The Port of Cork already entertains a considerable number of cruise ships and Galway Harbour Company has plans for an entirely new port. While such initiatives are happening, the problem with all such suggestions relates to the capital necessary to build them in the first place.

Chairman

Does Deputy Clare Daly wish to come in again?

Deputy Clare Daly

Is there a mechanism in place regarding the increased passenger numbers and so on, as well as the abolition of the airport tax? Obviously, there was a cost to the Department associated with its abolition. How will the Department monitor the alleged increase in passenger numbers that will flow from the abolition of that tax and how will that be calculated?

Deputy Leo Varadkar

The cost of abolishing the travel tax would fall to the Department of Finance rather than to my Department, which is a nice position in which to be. Obviously, the revenues do not go directly to my Department but to the general Exchequer. However, my statement to the airlines was pretty clear. When I was in opposition, the airlines certainly complained bitterly about the travel tax and produced expensive research from outside consultants to prove that the travel tax was causing passenger numbers to fall. The Deputy will recall that Ryanair more or less pulled out of Shannon Airport on the basis that the travel tax had forced it to so do. The airlines now have changed their minds. Aer Lingus now argues that the travel tax is not that important at all and the real problem lies with airport charges, while Ryanair is more or less saying the same thing.

Were I a sceptical person, I would suggest that they think they have the abolition of the travel tax in the bag and now have moved on to the next thing, which is the airport charges. However, the abolition of the travel tax is not in the bag and obviously it is linked to commitments coming forward from the airlines to the effect that routes will be restored and numbers increased. I note it has not yet been reduced to zero and I have not advised the Minister for Finance to so do. Moreover, even if it is reduced to zero, it can be increased again and can even be increased to a rate above €3, were that to be deemed necessary. The Department will monitor it using passenger numbers through the airports. The Dublin Airport Authority provides me with figures for the airports under its aegis every month. I get the figures from the regional airports separately and they also provide me with a breakdown of outbound and inbound passengers, which actually is very important because the policy objective behind the reduction of airport charges and abolition of the travel tax is not to encourage people to leave the country and go on holidays elsewhere but to encourage flights and tourists to come into the country. A balance must be found in this regard.

Deputy Clare Daly

It just strikes me as something that will be incredibly difficult to monitor and pinpoint exactly. Everyone knows Ryanair pulled out of Shannon Airport because the deal it had negotiated with that airport, whereby it paid practically no airport charges, ended and it was not prepared to continue. It had nothing to do with the travel tax but it is famous for saying one thing and doing another.

I refer to the regional airports and to the proposal that in future, none of them will receive anything. I note that from next year, two regional airports will receive no further funding and the other four have been told that from 2012, they must prepare for an eventuality whereby they may receive nothing either. In a restricted market, and the pool from which they can draw is relatively limited, I find it difficult to envisage how they could survive without any form of subvention. Is a potential sale of these facilities envisaged? If they are left without funding and a de facto inability to operate, should one close them or sell them? The Minister must have thought through to the next step because there are extremely serious consequences to reducing this element of subvention.

Deputy Leo Varadkar

All six regional airports are private entities and consequently, as none belong to the State, it cannot sell them. Moreover, none were particularly welcomed by the State when they were established and I question whether some ever should have been established. Galway Airport, for example, belongs to the chamber of commerce there and in other cases, such as Sligo Airport, the local authority often has involvement. As I recall, Kerry Airport is owned by many individual shareholders, the biggest of whom is an Arab who invested in it for various reasons in a previous era. As matters stand, Knock and Kerry airports more or less break even. Knock has just had its best ever year and Kerry has done well enough to be able to put aside reserves. As Deputy Daly has been in the aviation business, she appreciates how quickly and dramatically things can change but the aforementioned two airports are breaking even after a fashion. Donegal Airport is dependent on a public service obligation, PSO, contract and Waterford Airport on OPEX subvention. While the PSOs certainly will run until November 2014, OPEX subvention will be reduced in the intervening period. The message to the airports is that they must increase their business, reduce their costs and try to stand on their own two feet.

The reason is obvious, which is that subsidising air travel is very expensive. In some cases, it costs €14 or €20 per passenger journey, whereas the cost of subsidising a bus journey or a rail journey is perhaps 40c and €1, respectively. If one must prioritise one's spending, on what should one prioritise it? Does one prioritise business people flying in and out of a city conveniently and people who are travelling to hotspots so that they might have subsidised flights or does one subsidise people getting to work by bus in the morning? If this is what it boils down to, it is no argument.

Deputy Clare Daly

Is that not the point? It is linked to the Minister's comment on cutbacks in the subvention to CIE. One would be taking from one pot to facilitate another.

Deputy Leo Varadkar

Yes, but the subvention cut to the airports is 41% whereas the subvention cut to CIE is approximately 7% or 8%. I do not have the exact figure for this year.

Deputy Dessie Ellis

I have not seen the true figures. The Minister mentioned that it could be September before we know what money is available for capital projects and so on, but I would like to see the figures, compare them with last year's and examine the trend. We will reach a point at which we can no longer trim without it resulting in severe cutbacks. As with hospitals, we could lose some of our airports, which is of considerable concern. The same concern applies to our bus services.

In light of the snow and rain of recent winters, we have set emergency money aside. Virtually everything has been thrown at us. Should we budget for such eventualities now and leave aside a certain amount of money because of climate change? Although €10 million was set aside to repair roads, local authorities must get large stocks of salt and grit. In every Estimates process from now on, will we set aside an amount to cover the next year's potential requirement?

Deputy Leo Varadkar

Some €10 million was initially allocated to the winter roads programme with a further €60 million allocated under the jobs initiative. We do not have a contingency fund set aside. Perhaps we should, but setting a contingency aside at the start of the year would require money to be taken from other areas. If we return to a phase of economic growth in which budgets are increasing, this is the type of measure we should probably take.

Deputy Dessie Ellis

The concern is that, if we do not act pre-emptively, we will be robbing Peter to pay Paul. I am not saying that we can definitely get the money, but it should be indicated whether there will be an accessible contingency fund.

Deputy Leo Varadkar

I take Deputy Ellis's point. The constant temptation is to raid capital because capital can wait until next year. A contingency fund would be great were my budget not being slashed continually.

Chairman

Deputy Ellis referred to the reserves of salt and grit. We might have a mild winter and the reserves will stay stacked up for the following year. Does the Minister have plans for the introduction of additional tolling on current motorways rather than on the new road projects coming down the line?

Spending under subhead G5, tourism product development and tourism services, is due to increase during the coming period. Has the Department given consideration to what is described as out-of-season tourism? Many tourists from the UK tend to visit in the May-October period, but the domestic tourism market in Britain has changed radically in recent years and there is now, for example, out-of-season fishing; game fishing for rainbow trout or whatever is available 12 months of the year. In Ireland, it is only available at one location. The market for such fishing in Britain is large and it is an idea we could consider. I also have in mind niche tourism, including hobby-based tourism activities like photography. Has the Department considered ring-fencing a section of its budget to promote this type of tourism?

Deputy Leo Varadkar

In terms of the salt and grit, Waterford City Council is the lead authority for regional and local roads and the National Roads Authority, NRA, is sourcing salt for the national road network. I am confident that sufficient salt will be available in the case of a severe winter. The situation is more complicated than I expected. The main problem is storage, in that salt can corrode storage units.

No decision has been made regarding additional tolling, but consideration is being given to the matter. The Chairman will be aware that the local government efficiency review proposed additional tolling. The M50's planning permission provides for multipoint tolling rather than tolling at one point. I am reluctant in this regard, but it would be worthy of consideration were the additional toll income to be ring-fenced for road and public transport projects in the regions where the tolls were imposed. We have been unable to get the PPPs in respect of the Newlands Cross and Rathnew projects across the line. The Gort-Tuam situation is at a similar point. I would love to be able to do something about the M20 and the Dunkettle roundabout, for example.

Chairman

Not to toll them.

Deputy Leo Varadkar

A mechanism to ring-fence tolls for such projects would be worthy of consideration. My concern is that, no sooner has one implemented the tolls than one is using the money to maintain the roads. The Chairman will remember that this was the case with the environment levy. Given that there are many complicated EU rules on this matter, it would probably take three years to introduce additional tolling. The idea is in the mix as a consequence of the local government efficiency review and the capital review, but no decisions have been made.

A good bit of work has been done on out-of-season tourism, what they call the shoulder period. The peak period is the summer when everyone visits, after which activity levels shoulder down. In Spain, cheap package holidays to sun spots were offered to seniors during the shoulder period. This is not a runner in Ireland because people do not visit us for the sun, but we have been considering an activity-based campaign, which is pretty much what the Chairman suggested, for our shoulder period in winter. The idea is for people to visit Ireland to learn to fish or something else.

Chairman

Photography.

Deputy Leo Varadkar

Yes. A proposal is being worked up in this regard.

Chairman

That concludes the select sub-committee's consideration of the Revised Estimates for the Department of Transport, Tourism and Sport - Vote 32. I thank the Minister and his officials for presenting the Estimates. In accordance with Standing Order 87, the clerk of the sub-committee will convey a message to this effect to the Dáil. Under Standing Order 86(2), the message is deemed to be the report of the sub-committee. Is that agreed? Agreed.