SELECT COMMITTEE ON TRANSPORT debate -
Tuesday, 3 Dec 2002

Vol. 1 No. 1

Estimates for Public Services, 2002.

Vote 32 - Transport (Supplementary).

Chairman

On behalf of the select committee, I welcome the Minister for Transport, Deputy Brennan, and his officials. The purpose of today's meeting is to consider a Supplementary Estimate for Vote 32 - Transport. A proposed timetable has been circulated to members. It allows for an opening statement by the Minister, statements from Opposition spokespersons and an open discussion in the form of a question and answer session. Is that agreed? Agreed.

With the exception of the spokespersons for the main Opposition parties, I ask other members to be brief when asking questions. At our previous meeting with CIE we had statements rather than questions. It would be more productive for the committee to have a question and answer session. I invite the Minister to make his opening statement.

Minister for Transport (Mr. S. Brennan)

Thank you, Chairman. As this is my first appearance before the committee, I take the opportunity to welcome its establishment and I look forward to working with members from all sides of the House in making an input to transport issues. The remit of my Department is very substantial, encompassing roads, rail, aviation, road safety and related matters. I look forward to many discussions with the committee over the months and years ahead. My Department officials will be available at all times to attend meetings of the committee and discuss such matters as members may require. It is a matter for Members to decide the issues they wish to discuss.

With regard to the business in hand, the gross total of the Supplementary Estimate I am seeking is €126.1 million. This figure is offset by savings of €26.1 million on six subheads, leaving a net requirement of €100.056 million. There are three reasons for this Supplementary Estimate: the first is to cover major additional funding on roads maintenance and improvement: the second relates to adjustments regarding the national emergency plan; and the third element concerns fees for the legal action in relation to the Sellafield MOX plant, although this issue is no longer being dealt with by my Department.

The national development plan provides a clear strategy for the development of our national road network to the high standard necessary to support economic and social development and to facilitate regional development. The challenge now is to implement the strategy as urgently as possible. The Government has allocated considerable resources to the national roads programme, with investment of approximately €2.62 billion over the period 2000-02. There were 27 projects comprising 169 km of road, including nearly 50 km of motorway or dual carriageway standard, which have been completed to date and opened to traffic. Work is ongoing on a further 19 projects, comprising 154.5 km of road, including 121.5 km of motorway/dual carriageway standard. Of these, 12 are expected to be completed and open to traffic between now and the end of 2003.

A further 22 projects involving 224 km of road have obtained the necessary statutory approvals and are working through the system. Planning and design work has been advanced on approximately 65 other major projects and preferred route corridors have been identified for the five main interurban routes, which have now been finally agreed. A large PPP programme of 11 projects has been developed, of which one is in construction and four are at an advanced tender stage.

There has also been significant progress in 2002 on many major road schemes in the national development plan, including the Dublin Port tunnel, which is a major scheme involving very substantial investment; the M50 south eastern motorway, a key investment for the State; and the Kildare, Glen of the Downs and Ballincollig bypasses. We have made very substantial progress on all of those projects within the past 12 months. Projects completed in 2002 include the Enfield relief road, N18 Newmarket-on-Fergus bypass, which was officially opened recently, the N22 between Bealagrellagh and Gortatlea and the N25 from Rathsillagh to Harristown.

This substantial level of activity on roads projects has resulted in higher than anticipated levels of expenditure, which has necessitated a Supplementary Estimate of €125 million in respect of grant payments to the National Roads Authority. The bulk of the additional expenditure arises on schemes in progress or completed and PPP schemes at tender stage. Other factors that have given rise to additional expenditure include greater than anticipated progress on construction on the M 1 Cloghran-Lissenhall and Lissenhall-Balbriggan sections and the Drogheda, Watergrasshill, and N25 Youghal bypasses. Other factors include a price variation clause and risk buy-out on the Kildare bypass, land purchase liabilities maturing earlier than anticipated on schemes such as the Kilcock-Kinnegad motorway, the Monasterevin bypass and the Navan Road interchanges, and increased land acquisition costs generally.

Costs have increased significantly in recent years for a variety of reasons, including construction cost inflation, which was estimated at 15% per annum in 1999 and 2000 and 9.5% in 2001. I am pleased that this inflation has moderated, with a figure of 5% projected for 2002. The moderation in construction inflation will lead to the NRA being able to obtain better prices and to insist on tighter schemes.

The increase in the cost of the programme and changed economic and budgetary circumstances, combined with some delays, due partly to land access difficulties in 2001 affecting planning, have impacted on the pace of the programme. Some projects will, therefore, take longer to implement than planned. However, it is hoped that, with many projects reaching completion in 2003 and the advance of PPP projects, a number of schemes will be able to commence next year.

I will now deal with the administrative provisions of the Supplementary Estimate. A total of €1.156 million is being provided under the administrative subheads: €4,000 is being provided under subhead A3, advertising of the national emergency plan; €490,000 in respect of subhead A4, the postage costs of the plan; and a sum of €662,000 is provided under subhead A7, which relates to consultancy services. The latter subhead consists of €279,000 for national emergency plan design fees and €383,000 for fees arising from the Sellafield MOX plan legal action. Under the departmental restructuring that took place in June, these matters are now the responsibility of the Minister for the Environment and Local Government. The moneys relate to expenditure incurred by the former Department of Public Enterprise up to 18 June, which are being accounted for in the Department of Transport Vote for 2002. Moneys spent after 18 June in respect of these items will be accounted for in the Vote of the Department of Environment and Local Government.

I have outlined most of the reasons that I need an additional €100.056 million in this Supplementary Estimate. The committee is also being asked to consider savings that have been made in relation to transport matters such as Luas, the public transport investment programme, the CIE railway development programme, regional airports and the DTO. Most of these savings, which come to a total of approximately €26 million, arise as a result of unforeseen timing circumstances. The committee is aware that capital moneys, including the funds under question, are only paid out when they are required. If a capital project does not meet its deadlines, the funds will not be paid put. The overall projected excess is some €126 million which, when offset by the savings of €26 million to which I referred, leaves a net requirement in this Estimate of about €100 million. I would be happy to answer any questions of the Chairman and the other members of the committee.

Chairman

The Minister has set a great example with the brevity of his contribution and I hope members will follow his lead. If we ask questions quickly we will obtain answers sooner and get much more from the meeting. I thank the Minister for giving a synopsis of the material that has been circulated.

Mr. Naughten

I am sure the Minister for Finance will be delighted to hear that the Department is saving €26 million, a point to which I will return. The need for additional funding for roads projects under the national development plan is a key element of the Estimate the Minister has brought to the committee. The Minister mentioned that the national development plan is running at about 62% over budget. Roads projects are about two and a half years behind schedule and are running at about 66% over budget. We face a huge challenge in relation to these issues, but it does not seem to be addressed in the proposal before the committee or in the subsequent Estimate we have seen for the coming year.

Serious questions have to be asked about the delivery of certain projects, particularly those relating to roads, under the national development plan. If public private partnerships are not brought forward, we will not see construction of the five new interurban routes in 2003. The four PPP projects at advanced tender stage are also in doubt. I invite the Minister to outline the timescale he envisages for the projects and to tell the committee if he thinks they will go ahead next year.

There are serious concerns about value for money under the NDP, in light of the massive over-expenditure so far. The initial calculation of the cost of the roads, based on NRA figures, was totally unrelated to the actual costs involved. Perhaps the Minister will elaborate on the problems with the Dublin Port tunnel, which he mentioned in his contribution. I understand that the design of the tunnel used in the initial stages of its construction did not include extractor fans, which are an integral part of any tunnel project. Additional expenditure was needed to include the fans, which would be required in the event of a fire in the tunnel, for example.

I note that the projected savings in relation to this Estimate focus solely on public transport and the Minister has explained that they result from time factors. It is difficult to explain this matter to those outside this room who are sitting in traffic as we speak, or who will do so for a number of hours this evening. Public transport has not received the necessary investment and, therefore, is not helping to ease the congestion in Dublin and elsewhere. The saving of €26 million in relation to public transport initiatives, which the Minister mentioned, needs to be examined further. Park and ride facilities should be used to help to ease congestion in Dublin, but investment has not been put in place.

Funding for rail safety projects, including level crossings, has been exhausted. During the recent debate on the Railway Safety Bill, 2001, the Minister told the House that money to facilitate the removal of inadequate level crossings is crucial if we are to improve the safety of our rail lines. However, it seems funding is no longer available in that area.

The savings mentioned in this Estimate all seem to relate public transport. We will not see the introduction of integrated ticketing, something that might encourage and promote the use of public transport, for another few years. There is a stark contrast in the Estimate between roads projects that are running over budget - we seem to have lost control of budgetary expenditure in that area - and the apparent inability to spend all the money allocated for public transport. Questions have to be asked about the National Roads Authority's management of this area. I know the NRA has spent as much time in recent months trying to establish how I became aware of a cut in its maintenance budget as it has spent trying to address the issue of the overspend taking place under the NDP and under its budget.

There are 20 projects under the NDP roads programme that have been cleared by An Bord Pleanála. One of the key delays in regard to the delivery of projects to date has been getting them to the construction stage. There are 20 projects ready to go to tender and construction, but they will not be proceeded with in the coming year. Although they are a key element of the national development plan and despite the fact that they have passed through the crucial bottleneck of planning and development, these projects do not seem to be going ahead. Some of the smaller projects, such as town bypasses and national secondary routes, also appear to have been shelved.

The Minister has a proposal to introduce tolling in regard to some of the public private partnerships. One of the key elements of tolling is that alternative routes would have to be made available so that people could have a choice. A toll is to be introduced on the new M6 motorway between Ballinasloe and Galway. The alternative route is to use the town of Loughrea, which, as the Minister is aware, is currently clogged up with congestion. It will still be a severe bottleneck once the new motorway is tolled, but the Minister does not appear to be forthcoming with the investment in regard to bypassing Loughrea.

The State is currently investing €1 billion per annum outside the country through the National Pensions Reserve Fund. Neither the Department of Transport nor the Cabinet subcommittee on infrastructure has approached the administrators of this fund regarding the use of some of money it contains. Investing in our infrastructure would provide a guaranteed return. It is a key element of funding that could be made available to swiftly address some of the bottlenecks, both in the public transport sector and in the roads programme, and this would ease the level of congestion.

The Luas project is running behind schedule. The Estimate before us indicates that savings are being made in regard to it. There is a blatant contradiction between the non-delivery of key infrastructural projects in regard to public transport and the savings that are being presented. We are not meeting key targets and savings are being made at a time when the city is grinding to a halt. In spite of the introduction of Operation Freeflow yesterday, Dublin traffic came to a standstill. The day the Minister presented his Estimates, the city also ground to a halt. This contradiction gives rise to serious concern. It raises the issue of the delivery of these projects and the targets and timescales relating to them.

On a number of occasions I have asked the Minister's Department for revised figures in regard to the roads programme but they have not been forthcoming. Does the Department have those revised figures? There is no point in looking at the future direction in regard to the national development plan if the Department is unaware of the up to date figures in respect of these projects. How can we plan for the future if we are working off figures based on the position in 1999?

Ms Shortall

I welcome the Minister and his officials. Will the Minister confirm what we know is contained in the Estimate for the Department next year? If he receives an additional €100 million on the current year's Estimate, that will bring up the total to €1.878 billion. However, the Estimate for next year is €1.818 billion. When the Book of Estimates was produced, the Minister stated that he had procured a 2% increase. The actual figures, including the €100 million, suggest that the Minister has not managed to secure even the same level of funding as last year. In fact, he is about €60 million worse off in the current year. In real terms, this represents a decrease of some 7% to 8% in his Department's Estimate. If that, as it seems to be, is the case, these figures represent a very disappointing performance in securing a fair share for the Department at the Cabinet table.

The Chairman complimented the Minister on his brevity. We all try and keep our contributions short and to the point. However, I am not satisfied with the explanation that has been provided. The Minister came in here to tell us about the extra €125 million being sought for road building purposes, without giving any indication of why there is a requirement for the additional funding. A reference was made to unprecedented levels of activity resulting in higher than anticipated levels of expenditure, but no details have been given. A few general areas were referred to. We are entitled to the information on the specific projects concerned. In what areas did the overruns, price variations or greater expenditure than anticipated occur? Will the Minister provide with a breakdown of those details? It is a massive amount of money and it is not sufficient to talk in general terms about the Department's road building programme. The purpose of today's meeting is to have a briefing and obtain details of why it is that such a huge amount of additional funding is required.

The net figures presented today in regard to this Supplementary Estimate outline extensive additional funding for road building purposes and savings on public transport. What does that tell us about the priorities of the Minister and his Department? There is a consensus on all sides of the House, and from all agencies involved, that the critical element in regard to transport is to shift people from private to public transport. Does the Minister agree with that principle? The figures seem to indicate that he does not. He is putting massive amounts of additional funding into road building and he is not capable of spending the funding that was allocated for public transport. The figures produced in regard to these savings are scandalous. Savings of €3 million were made in regard to Luas. Savings of €4 million were made on CIE investment. In the area of rail development, savings of €6.4 million were achieved. Some €2.5 million was saved on regional airports funding. A total of €10 million was saved in regard to Dublin transportation.

It is an extraordinary indictment of the Minister and his Department, that he was not able to spend the money allocated to him when public transport providers are crying out for additional funding. This week alone, CIE imposed large fare increases across all of its companies. Yesterday, people were faced with increases of 20% and 23% on standard Dublin Bus fares. Today we are getting information on Iarnród Éireann fares that have also gone up significantly and the same is true of Bus Éireann. The Minister's actions do not support the principles to which I thought we had all signed up, namely, to promote public transport and to discourage the use of private transport. I would like the Minister to explain why he was not able to spend the €26 million on projects that are long awaited and long overdue and for which members of the public are crying out. It is a dreadful indictment of the Department if it is not able to spend. We would like to have seen the Minister looking for an additional €100 million in funding for public transport services.

Representatives of CIE appeared before the committee a couple of weeks ago and referred to how the company is closing down rail lines because it cannot balance its books since transport companies are so underfunded. Is there a problem within the Department or is there a problem with the transport providers that this money cannot be spent? Significant sums of money have not been spent. With regard to the roads programme, the Minister did not provide the details on why he needs all the extra money. I would like him to provide details on why the €26 million was not spent.

I would like the Minister to outline clearly his views on transport. We have heard interviews with him on the airwaves and read comments he made in the newspapers in recent months in which he addressed different topical issues. He referred to the need to do something about these matters. I listened carefully to his recent interview with Pat Kenny in which he spoke of the importance of examining the transport problem.

Will he outline his ideology in relation to transport services for the committee? Does he believe in the need to encourage people to use public transport or is he prepared to continue funding the very powerful roads and car lobby? His actions in that regard certainly seem to be borne out by the Supplementary Estimate? He seems far more interested in heeding and acting on the requests and advice of the roads lobby and the private car lobby. That is not good enough. This country is way behind in terms of infrastructure provision and our capital city is choking because of the absence of proper infrastructure and of a decent public transport system.

The business community has stated that traffic congestion in Dublin is costing approximately €600 million per year. Dublin Bus has told us that traffic congestion is costing it about €35 million per year. What is the Minister doing to rectify this? It is not sustainable, on any grounds - environmental or economic - to allow the current level of congestion in Dublin to continue. Not only is it costing money in terms of a loss of business and increased expenses associated with everyday living, but it is costing us in terms of the loss of the quality of life, stress, longer working days, etc.

What is Minister's strategy? We know of other strategies that have been produced. We have heard the DTO's strategy and we know what the public transport providers want to do if they are provided with adequate funding. Has the Minister any commitment to putting in place decent public transport of the kind that exists in other European countries, even those that are at a lesser stage of economic development than Ireland?

What does the Minister intend to do in relation to the subvention for public transport? During Question Time last week we discussed the subvention for Dublin Bus, which stands at about 25% of its operating costs. The Minister informed us that this had increased in recent years, which is a good development. However, he said the subvention levels are increasing at an alarming rate, which I thought that was an extraordinary comment for the Minister for Transport to make because he should be aiming to bring up the level of subventions of public transport to average EU levels.

The EU average at the moment is 50% in the case of public transport companies. If the Minister was committed to the principle of public transport he would be aiming to increase the level of subvention match that of the EU average. I would expect him to do everything in his power to secure that level of funding. It is extremely disappointing that the savings he has made are on the public transport side when, at the same time, he is seeking massive increases for road building. This does not make sense.

As an end of year report, the Supplementary Estimate before us is disappointing, as is the performance of the Minister and the Department. It goes against all progressive thinking in terms of environmental and economic sustainability. There are many explanations required and I hope the Minister will offer them.

Chairman

I disagree with what has been said. The Deputy and I both served on the local authority and the overall policy for Dublin city was a three-legged stool, as is was called, incorporating roads, public transport and traffic management. Generally speaking, that policy is being adhered to. Obviously, there are problems with certain aspects, but they are mainly infrastructural in nature and relate to trying to get things done as opposed to a lack of commitment.

Is there no penalty clause in respect of road building projects? There seems to be a massive overrun in the cost of roads. People tender for a job and no sooner are they successful in their application than they add on bits and pieces and the cost of the road in question rises enormously. Are we signing contracts with no penalty clauses?

If one is building a road in certain countries, one rents it. If there are 20 km of motorway, one rents it and then the rent is included in one's cost. After a certain date, one has to pay for the rent of that road so if one is delayed in the finishing of its construction, the rent comes off what one has been allocated in the original tender. This is a definite incentive for people to finish the job on time and within budget.

Somebody pointed out to me recently that, in 1904, one could go into an office on Dawson Street and buy an integrated ticket for transport in Dublin. In 2002 we are being told that one cannot do this until 2005, which seems extraordinary. Nobody can give me a reason we cannot have an integrated ticketing system for transport in Dublin, considering that it was done in 1904 in an office just around the corner from the Oireachtas. Will the Minister comment on the points I have raised?

Mr. P. Power

I welcome the Minister and his officials. I was going to confine myself to speaking about the Estimates, but Deputy Shortall raised a number of issues not directly related to them. The first of these concerns the Government's commitment to public transport, which she criticised severely. I thought the huge administrative bother endured throughout the summer in setting up a specific Department of Transport, along with the associated costs, would have demonstrated the Government's commitment to transportation issues. To question the bona fides of the Government in this instance flies in the face of logic. To have a Minister whose job is specifically geared towards the number one public policy issue - transport - is very enlightened policy on the part of the Government. I take issue with Deputy Shortall's contention in that regard. I was intending to confine myself to the Estimates, but I do not think that criticism can be allowed to pass.

I am also interested in the Minister's response to Deputy Shortall's other point about savings. I was of the opinion that the savings set out in the Estimates - I may be corrected on this - would merely be statements of fact, that projected expenditure on particular areas was not incurred and that, therefore, savings were made. The officials and experts may clarify the position, but that is my interpretation. To infer that it is a retrenchment or cutback in public transport would be incorrect. I would like the Minister to elaborate on this.

The reason the Estimate is needed is set out quite clearly. One does not have to look at figures on a sheet of paper to realise this. There is an unprecedented level of activity in road building and public transportation projects at present. One cannot come into Dublin without coming across such a project, be it the Luas or the DART. The bottom line is that we are not talking about cutbacks. An extra €100 million is being spent this year alone and that is to be welcomed.

One of the main reasons the Minister gave for the increased expenditure was the price variation clause in the risk buyout of the Kildare bypass. As somebody who has, in a former career, negotiated this kind of large-scale infrastructural project, I feel that the tendency to have price variation clauses - considering the kind of money that is being spent - is a major failing in public policy. Does the Minister feel it is preferable to continue with this? I have seen evidence of massive cost overruns. It is like giving the developers an open chequebook to overspend on infrastructural projects. Fixed-price contracts are a much more sophisticated way of doing business, particularly in terms of how we pay the builders and the contractors for this sort of work. What are the Minister's views on the public private partnership programme of 11 projects? Does he think that the PPP model is the quickest and most effective way of bringing forward the transportation projects to which he referred?

Mr. Ellis

When is it envisaged that work will start on the Kilcock-Kinnegad road? I accept that this is not the worst bottleneck on the N4. The latter can be found on the stretch from Heuston Station to the M50 roundabout in Palmerstown. It took me 90 minutes to negotiate these few miles of road last Thursday evening. In the context of the overall development of that road, something must be done to ensure faster movement of traffic on the urban section.

Additional money is being provided for rolling stock on mainline rail and the DART. Why, in the recent announcement from Iarnród Éireann, was upgrading of the rolling stock on the Dublin-Sligo-Westport line not mentioned? No date was given for when this might be done. There has been massive investment by the State in this line in recent years, but nothing is being done to upgrade the rolling stock.

Is there any prospect of introducing an open skies policy with regard to air transport within the country? It might lead to a more cost-effective and better service as far as regional airports are concerned. The public service obligation is fine, but it has become a closed shop. The total assessment of airlines is not as tight as it should be. Some operators virtually have a licence to print money.

Is there any possibility of having fixed-price contracts with no allowances? Contracts are being underpriced in some cases and then the contractor goes for the add-ons to make up its profit or the viability of the project. Are we not carrying out proper assessments prior to the issuing of the contracts to see whether the tenders are able to substantiate the work needed? The overruns - 15% was mentioned, although it is back down to 5% this year - show that someone has been seriously lax in assessing contracts. Fixed-price contracts will have to be brought in if we are to make progress.

Mr. Glennon

I join colleagues in welcoming the Minister and his officials. I wish the Minister well in his highly onerous task.

Like Deputy Power, I welcome the fact that transport has a brief of its own. It is an area of major importance which impinges on the nearly everyone's life. It is of huge importance to people who live in my constituency, Dublin North. Dublin Airport lies at the centre of the constituency and the port tunnel is less than a mile from its boundary. We also have the biggest road building project currently under way, namely, the airport-to-Balbriggan phase of the M1.

I agree with my colleagues remarks about fixed-price contracts. This area must be given careful consideration.

The Chairman referred earlier to the integrated ticketing system. I agree that such a system is important in terms of the overall development of the transport system, particularly in the greater Dublin area. There is also the question, however, of the integration of the different transport systems themselves. For example, park and ride facilities are alluded to in almost every plan we have read about the development of the transport system in Dublin. However, to say that progress has been slow in providing these facilities would be an understatement.

Resources should be devoted to the provision of appropriate feeder bus networks to the QBC system, which has been successfully developed over the last few years despite huge criticism on each occasion a new bus lane was opened. Nobody could say that the system has not been a success, but it is not being exploited to its fullest potential. One of the reasons for this is the absence of feeder bus networks. The average length of motorway or road under construction has changed from 4.3 kilometres for roads completed to date to 8.1 kilometres for roads under construction. For projects that have received the necessary statutory approval, the average length is 10.2 kilometres. Is this a statistical coincidence or a deliberate policy decision? If so, on what basis was it taken?

Is the port tunnel project on schedule and within budget? Have there been any major difficulties in regard to health and safety in such a massive undertaking?

Mr. M. Brady

I welcome the Minister whom Deputy Shortall said was giving priority to private road users by putting emphasis on road construction. Private operators use roads also and it makes their operations more efficient if they can get from Dublin to Cork as quickly as possible. Travelling from Dublin to Athlone or Carlow, it is impossible to travel any great length of road without coming across some work. Credit is due to the Minister for putting such emphasis on construction.

In my constituency 30 new carriages have been provided for the DART, a successful service that has been running for 20 years. Last week Iarnród Éireann reported to the committee that the number of passengers on intercity trains had risen by 60%. The message is getting across and more members of the public are using public transport. Better utilisation of our waterways should also be examined. There could be a ferry service down the River Liffey to connect with cross-channel ferries.

We are often asked about tolling. It would be useful if information could be provided by the Minister.

Mr. Brennan

The Estimates figure for 2003 is €1.818 billion, which figure does not take into account whatever decisions may arise in the budget tomorrow. As the figure for this year was €1.718 billion, next year's Estimate is higher. I acknowledge that if the outturn for this year is taken into account, particularly the Supplementary Estimates, the current Estimate for 2003 is slightly less than the outturn for 2002. This may be altered, depending on the Minister for Finance's Budget Statement tomorrow. Therefore, Deputy Shortall and I are both right. I am right when I say next year's Estimate is greater than this year's and Deputy Shortall is right in saying next year's Estimate is less than this year's outturn.

I did not give details of the figure of €125 million for particular road projects because they are the responsibility of the National Roads Authority in terms of detailed management. It is not the job of the Department or Minister for Transport to manage each project. Under legislation passed by Dáil Éireann, the NRA has statutory responsibility for individual projects.

The €125 million Supplementary Estimate for national roads is made up of €47 million for the construction of the M1 on the Cloghran to Lisadell, Lissenhall to Balbriggan and the Drogheda bypass routes, and construction work on the Watergrasshill and Youghal bypasses on which there has been greater than anticipated progress. A total of €30 million is being provided in additional funding for national secondary roads. There is a further €23 million to meet land purchase liabilities which are maturing earlier than anticipated on schemes such as the Kilcock to Kinnegad motorway, the Monasterevin bypass and the Naas Road interchanges. A further €15 million is being provided across a range of schemes, on which there has been better than anticipated progress, and for increased land acquisition costs generally. There is approximately €10 million in connection with a price variation and risk buy-out clause associated with the Kildare bypass.

I was asked if I was in favour of a modal shift, getting people out of their cars and onto public transport. Yes, I am. I have said this many times and will continue saying it. It is the duty of any Minister for Transport to develop public transport and encourage people to get out of their cars and onto public transport. Society, however, is changing. Many years ago we would have said to people not to buy a car but to get onto a train or bus. That argument will not continue much longer. The average household now owns two or three cars due to lower interest rates, lower taxation, substantially higher incomes and more competition in the car market.

Mr. J. Bruton

That will all be solved tomorrow.

Mr. Brennan

People are buying cars.

Ms Shortall

They cannot get onto buses.

Mr. Brennan

Just because they own a car they do not have to use it every day. People in pin stripe suits with laptops sit on the bus because of the quality bus corridors. There is no difference between the Deputy's strategy and mine in wanting to get people off the road.

Ms Shortall

Government spending does not support such a strategy.

Mr. Naughten

The Minister should travel on some of the bus services, on which it is impossible to swing a cat at rush hour, never mind open a laptop.

Ms Shortall

When was the last time the Minister travelled by bus?

Mr. Brennan

This is not Question Time.

Ms Shortall

When was the last time the Minister was on a bus?

Mr. Brennan

I was on a train last week.

Ms Shortall

When was the Minister on a bus?

Mr. Brennan

I agree with the strategy. We differ because I make no apology for investing in motorways and bypasses. The Deputy should and explain the policy of not investing in motorways and roads to the people of Loughrea, to whom Deputy Naughten referred, or those in Fermoy or Sligo who are waiting for bypasses. A range of other places throughout the country are desperately choked because they need bypasses.

We need to build motorways to the five big interurban centres. I do not concur with the Deputy on this. I acknowledge the honesty of the Green Party, which has urged me across the floor of the Dáil not to build motorways and to put the money into public transport. I do not agree with the Greens, but I acknowledge their honesty in being forthright. If that is also Deputy Shortall's approach, then that is fine, I acknowledge that honesty also, but it is not my policy.

We must complete the national development programme. Our economic infrastructure requires that these motorways and dual carriageways be built. There is an economic as well as a social element to transportation and there are a number of problems relating to freight transport with which we must deal. I want to get more freight on to the railways and have taken action recently to ensure that we keep our rail freight operations in place. That broad policy is one about which we must be clear.

One thing that has helped is that there is a now a dedicated Department of Transport. This means that roads and railways are being dealt with together under the aegis of one Department for the first time. None of my predecessors probably ever really had to sit down and consider what they were doing, for example, about investment in railways to Cork city or about a motorway to Cork city. The Monasterevin bypass, for example, is desperately needed. Anybody who has sat in traffic on the existing road will know that. I will not help them by telling them I am trying to encourage people in Dublin or any other city to take the bus and that I cannot, therefore, invest in that motorway and ensure it is completed.

All of these matters will now be dealt with by one Department. The Deputy is correct that it is important to ensure that we have a coherent philosophy. Such a philosophy is now emerging because as a result of the creation of the Department of Transport. It is not now the case that the Department of the Environment and Local Government will be responsible for building roads while the Department of Transport deals with the railways.

We have some difficult choices to make. Sometimes if we build a big motorway, it may not be possible at the same time to invest very heavily in a particular railway, or vice versa. No doubt, on the floor of the Dáil, everybody will call for whatever investment is required.

The Deputy inquired about fares. CIE asked me for a 20% increase in fares but I authorised a 9% increase. I expect that 9% to be applied properly and have instructed my Department today to check on that. I heard some stories, as, no doubt, did the Deputy, that the increase was not being implemented properly. On a technical point, I do not actually control the special discount fares and the special fares that are brought out from time to time. Statutorily, the company has complete control over those. I only control basic fares, which are subject to the 9% increase. I will ensure that CIE adheres to that increase. Incidentally——

Ms Shortall

Is the way Dublin Bus has computed the average fare acceptable?

Mr. Brennan

I do not have information on that matter as yet. I sought a report this morning from my Department on how the fare increase in being applied. The chairman of CIE was in touch with my Department this morning to explain the position. I will insist that the Government's decision of a 9% increase is applied properly. Special offers and the price of monthly, quarterly and annual passes are at the company's own discretion. In theory, they are supposed to cost less than the daily fare so there should not be an increase of more than an average of 9%.

It is worth pointing out that inflation in the last ten years has been 30.2%, but CIE fares have only gone up 10% in the same period. That means that CIE fares have come down 20% in ten years, so they did need to catch up and I thought the 9% increase was a fair way to get them started on that process.

The Deputy asked about congestion in the city. I am not going to be the Minister for Transport who takes responsibility for the traffic. My job is to develop the strategies to invest in roads, the railways and airports and to discourage people from using their cars and so on. Individual city councils and local authorities have clear responsibility for traffic management. We pay them large sums of money through the Dublin Transportation Office, for example, to design strategies to manage traffic. There is also a Dublin Traffic Office, for example. There is a clear responsibility on the part of local authorities to manage traffic in their areas——

Ms Shortall

There is not one overall authority, as the Minister promised. Is that not the problem?

Mr. Brennan

I do not think one can have an overall national authority on traffic——

Ms Shortall

No, within Dublin.

Mr. Brennan

I accept that. The Deputy will recall that this was one of the reasons that I had a little run-in with a particular body about things like signs. The Dublin Transportation Office has a budget of approximately €35 million per year to devise strategies on transport. Dublin City Council, in turn, gets money from the Dublin Transportation Office. Then there is the new Department of Transport. Thus, there are a whole lot of people picking at the same pie. I have spoken to the other two bodies and we are trying to work out how we can perhaps centralise operations. One proposal is for a greater Dublin transportation and land use authority. Perhaps in that context we can try to pull operations together.

Ms Shortall

It has slipped down the Minister's agenda——

Mr. Brennan

I have a very big agenda, as the Deputy knows——

Ms Shortall

The Minister promised it this year.

Chairman

According to Dublin Chamber of Commerce, there are approximately 30 different groups dealing with traffic in Dublin, which seems absolutely ridiculous.

Mr. Brennan

That is not right, Chairman, not statutorily.

Chairman

Not statutorily, but——

Mr. Brennan

The Dublin Chamber of Commerce deals with traffic but not statutorily.

Mr. J. Bruton

I wish to ask about the strategic rail review, which——

Chairman

Could we leave that until the end?

Mr. Brennan

I will take the Deputy's question.

Mr. J. Bruton

I am concerned about the proposed rail links to Dunboyne and Navan. I understand that these are tied up in the strategic rail review, which is not due to be available until the end of this year. Has any indicative figure been included in the Minister's calculations for next year to take account of the likely recommendations of this review, particularly in light of the fact that that there is an underspend on this year's Estimate as far as rail is concerned?

Mr. Brennan

The rail review will probably be available in mid-January 2003. My predecessor, Senator O'Rourke, set up the review to look at the railways over the next 20 years. When I get that review I will have to look at our capital programme. Then it will be a Government decision to try to prioritise that capital programme. Spending on public transport last year, for example, was €700 million and a substantial portion of that was on railways. There is not a specific figure for that Navan line. If the strategic rail review was to indicate that it was a substantial priority, the Government would then have to apply the available funds to those priorities. If the rail review says it is a priority and if the Government agrees and can accommodate it within the budget, we will make the investment. The short answer to the Deputy's question is that there is no specific figure in the Estimates for that line at present.

Deputy Shortall asked about my ideology. We could perhaps go into that a number of times in the weeks and months ahead. I believe four things in regard to transport: first, in making the investments - you have to invest in public transport, it will not happen of its own accord; second, in reforming the institutions that supply public transport, whether they are airport, bus or rail authorities; third, that there is a clear role for competition in the delivery of transport facilities - this is not totally the duty of the State but it has a responsibility to ensure it is delivered and we must recognise that an increasing number of economies are procuring that service and ensuring that there is a buzz in the system and that, in contrast to an existing eastern European model in which I do not believe, people have a choice; and fourth, in putting all of those things together, focusing on delivering and encouraging investment right a cross the board in these areas.

That would be my broad ideology, which obviously has to be broken down into individual policies. The measure of my success or failure will not be the amount of money I pump into transport or the amount of money I obtain from the Cabinet. That is not my approach to politics. Whether one is a good or a bad Minister does not depend on how many billions one obtains for one's Department.

We have a responsibility to ensure taxpayers get value for money. I do not believe in the "tax and spend" approach. Some countries have made huge investments in public transport but have 50% and 60% income tax rates. We can make the investment and we can raise taxes. Those who travel on trains and buses are also taxpayers, but little or no money is being provided for this from companies which provide such services. CIE is receiving €10 million a week from the taxpayer. If we are to spend what other states are spending, we must adopt higher tax rates. I do not agree with the Deputy's approach to roads, I think they should be built.

Ms Shortall

Under the Minister's spending priorities, an additional €125 million will be spent on roads but €26 million cannot be found for public transport. That says a lot about his priorities.

Mr. Brennan

Progress has been better than anticipated on the Drogheda, Watergrass Hill and Youghal bypasses. I presume the Deputy would like to see these projects completed.

Ms Shortall

Why has similar progress not been made on public transport?

Mr. Brennan

I do not regard spending money as a test of my success. For example, there is no shortage of funds for Luas but I will spend €3 million less than anticipated because the construction phase is running three months late.

Ms Shortall

Could not that have been redirected to the planning phase of the north side line?

Mr. Brennan

I have to work within my overall Estimate. The Deputy suggested that it is a sign of failure that I was not able to spend €3 million on Luas. I will pay for the work when it is done. If contractors, planning difficulties, etc., delay the work, I will not allocate the money until it is finished. It would be daft to do anything else.

Deputy Naughten asked me about the tunnel. The National Roads Authority and Dublin City Council assure me that safety on the project meets the highest possible standards. I do not have the details of the extractor fans but I was assured during a recent visit that they meet the highest standards.

Mr. Naughten

Did the Minister bring his boots?

Mr. Brennan

I did. I was asked about level crossings. There have been savings of €6.4 million on the railway safety project. The annual programme is broadly on target to be completed by the end of the year. However, difficulties have been encountered in other areas. Serious difficulties have arisen in securing landowner agreements for improvements to level crossings.

Mr. Naughten

I know landowner agreements are not at issue in some cases. Irish Rail is not prepared to upgrade the level crossings on the roads it owns - the train station in Roscommon town is just one example of that.

Mr. Brennan

I encourage the committee to meet the National Roads Authority and the companies and consider these issues further. We have provided substantial funding for railway safety - there is a new Railway Safety Bill before the House. I share the Deputy's concern about level crossings.

Deputy Naughten asked me about tolls on the Kilcock-Kinnegad bypass. That is at final negotiation stage and a preferred bidder has been selected. I support tolling as long as it is strategic and uses state of the art electronics. I do not believe tolls can be charged on every bypass in the country. It is important to remember that tolls do not pay for the publicly funded part of the road. The debate on the future of road developments is ongoing. Questions such as use of the national pension fund, road rental, shadow tolls and tax breaks are all under discussion.

We cannot construct the nation's roads on the basis of annual budgets and this will be a major challenge. We have duties regarding ratios in the EU stability pact. It would benefit the committee if it could examine this. We cannot fail to finish the inter-city motorway network.

Mr. Naughten

The debate on the principles of tolling cannot be engaged in again. The national toll roads have an "easy pass" system in place. It is possible that three or four such systems could come into operation? Whether one agrees or disagrees with tolls, that issue must be resolved before contracts are signed.

Mr. Brennan

I agree. When I speak of state-of-the-art electronic tolling, I am referring to toll booths that do not use barriers and through which vehicles can proceed at normal speeds. Such a system operates in Canada.

The Chairman asked about penalty clauses in contracts. There are no specific penalty clauses because they are not fixed price contracts.

Chairman

Why not?

Mr. Brennan

There are standard construction penalty clauses. If contracts are not fixed price, no penalty is applied if the price is not met. However, one may be applied if a deadline is not met. I am interested in the idea of fixed price contracts. I recently met with the NRA and asked it to urgently supply me with its proposals on fixed-price contracting.

Fixed price contracting carries a premium. If one signs a fixed price contract now, one will not get it at the normal price. There is the contract price subject to the price variation clause and the fixed price contract. The cost of the fixed price contract is probably - I am only guessing - up to 20% higher. One has to take a gamble and decide whether one should pay the premium up front to get the fixed price and secure the contractor. There is also the other issue. Let us suppose one leaves all the risk with the contractor and its workers walk off the site or it goes into liquidation. The road has to be finished anyway. It is not as simple as it looks.

I was asked about integrated ticketing. I have asked the Railway Procurement Agency to bring forward an interim solution to the problem rather than wait for 2005.

Deputy Glennon also asked me about fixed price contracts and integrating park and ride facilities. The Luas system has substantial park and ride facilities attached to it. I have asked CIE a few times to look at sending feeder buses to service the Luas system. When the DART was started many years ago, CIE provided feeder buses, but they faded away after a year or so. For some reason people were not prepared to take two public transport vehicles for the same trip. They were prepared to take their car and catch the train, but they were not prepared to take their car, get on a bus and then take the train. There was resistance to the concept. However, I will monitor the matter and see if it can be tried again and whether it will work. One method of public transport seems to be the most the market will take.

The Deputy also asked about the size of road contracts. We are trying to offer larger contracts because we want to entice overseas contractors to bid for jobs. It will probably not be the big issue in the next couple of years that it was in the last couple. We did not get many overseas contractors in the last couple of years. A Turkish company worked on the Ballincollig bypass in Cork and there were one or two others. One of the reasons we did not get many was that the contracts were too small. There is a dilemma involved. If one waits for the big contracts when one could have done smaller jobs, some bypasses will not be completed. However, we are working on this.

Deputy Power asked about savings, the price variation clause and public-private partnerships, on which we need to get moving and implement. As I have said on a number of occasions, the only things I have seen happening in relation to such partnerships in the last couple of years are seminars, the biggest industry around them. There is a second public-private partnership project under way on the second West Link bridge. There are 11 in the pipeline, on which we need to press on and make them happen. There are a couple of reasons they have not yet happened. The cost of bidding is expensive. We need to standardise much of the legal and accountancy work around it to attract more bidders, a matter on which we are working.

I answered Deputy Ellis's question about the Kilcock-Kinnegad road. With regard to the Sligo line, there has been substantial investment in the track but not rolling stock. I will bring the Deputy's comments about allocating newer rolling stock to the line to the attention of CIE. He also asked about regional airports and the public service obligation or PSO, a matter we will have to examine over the next couple of years. The taxpayer is now paying a subsidy of more than €200 on a ticket for somebody who wants to fly from Knock Airport to Dublin.

Mr. Ellis

Ryanair will fly one to London for €10.

Mr. Brennan

The subsidy is €200. It is more, but that is the round figure. It is costing €20 million this year. I am conscious of Deputy Shortall's earlier remarks about our priorities. We are locked into contracts for three years, but during that time we will have to look long and hard at whether we can subsidise these links or whether it is better to make the investment in the airports and let them do their own marketing and so forth. I want to examine these issues. One should be conscious, however, that when one sees somebody on a flight from any of the regional airports to Dublin, the taxpayer is probably paying between €100 and €200 for that single flight, apart from the fare paid by the passenger. It is a substantial investment of taxpayer's money.

I dealt with Deputy Ellis's question about contract management and fixed prices. Deputy Brady mentioned the waterways. People sometimes smile when they are suggested. They think it is a silly idea, but it is not. Many cities around the world have water taxis and use their waterways. I do not know enough about the subject at this point, but it is certainly worth looking at. However, I would not like to be crossing Dublin Bay at 7 p.m. on a November evening in a water taxi.

Chairman

It is an interesting idea. It should be possible to have a boat that would travel from Dún Laoghaire to O'Connell Street Bridge. However, I understand that when constructed Macken Street Bridge will be too low to allow boats used on the sea to travel up the river. Last night somebody explained to me that there was a problem with the design of the bridge. That is unfortunate. There should be a weir on the Liffey. There is a great opportunity to use it as rivers are used in other cities. This could be done with a little imagination. I understand a company approached the Department or Dublin Corporation about the matter, but the boat would have to be safe at sea because it would have to go out into Dublin Bay. It could not be like the ones used in Paris. It would require a deeper hull. The problem is that it would not be able to travel safely under Macken Street Bridge.

Mr. Brennan

That was Dublin City Council.

Chairman

Yes. It would be a means of getting a considerable number in and out of the city in a more imaginative way.

Mr. Brennan

It is a novel idea and worth examining.

Mr. M. Brady

I inquired into that aspect and the problem could be overcome. It would be possible to lower the boat by using modern technology, particularly at Macken Street Bridge.

Mr. P. Breen

I am shocked to hear that every passenger travelling on flights from regional airports is subsidised by up to €200. While the subsidy remains, there will be no problem with the routes from Kerry, Galway and Sligo. While Shannon Airport is an international rather than a regional airport, it does have some regional functions. Aer Lingus used to serve it a number of times per day on the Shannon-Dublin route. However, it dropped the evening flight which Aer Arann took over without a subvention. It is running a skeleton service with the result that there is no early morning or late night service on the route. I have been looking at the savings of €2.5 million which the Minister has made on regional airports. It is no wonder airlines are not staying on the Shannon-Dublin route when they receive no subvention.

Many businesses are crying out for an air link from the mid-west region to Dublin. If there was an attractive fare available, it would take people off the roads and be another form of public transport. What is the Minister's opinion of this and the PSO regime in general about which he spoke briefly?

Chairman

The Deputy's question does not relate to the Estimate.

Mr. Brennan

There is a saving on regional airports. Average Exchequer subvention per passenger for a one way trip from Donegal to Dublin is €175; from Sligo to Dublin, €87; from Knock to Dublin, €280; from Galway to Dublin, €56; from Kerry to Dublin, €57 and from Derry to Dublin, €118. The load factors on these routes, that is, the percentage of people using the aircraft, are: Kerry, 72%; Galway, 65%; Knock, 35%; Sligo, 40%; Donegal, 50% and Derry 54%. We are locked into a three year contract in respect of each of these routes. It is not possible to extend subvention to international airports, of which Shannon is one. This is part of an agreed European public service obligation which we would not be permitted to apply to Dublin, Shannon or Cork Airports.

Ms Shortall

When will the contract end?

Mr. Brennan

At the end of 2003 or the middle of 2004 - approximately two to two and a half years away. I will get the exact date for the Deputy.

Mr. Glennon

I may have missed the Minister's answer to my question about whether the port tunnel is on schedule and within budget.

Mr. J. Bruton

As regards the format of the Estimates we are considering and will consider next year, will the Minister consider introducing a greenhouse gas effect index of the various forms of expenditure? It seems air traffic causes the most damage, yet it is taxed the least. Road traffic causes more damage than rail and public transport. Could some form of quantification of the relative external economic effects on the environment be included with the financial figures? Such a quantification would make a big difference. It has been said by many that unless one can count something, it does not count. It seems one of the reasons the environment is losing out is that we have not found a means of counting in figures the damage done.

Mr. Brennan

I am sure we have those figures. Is the Deputy talking about the debate on carbon tax?

Mr. J. Bruton

I am not talking only about that. I come from a village which has been flooded, probably as a result of climate change. That is a real financial loss to the country. It seems we are spending money without having regard to whether we are creating that type of external economic effect. Would it be possible in the Estimates for next year to include some form of environmental impact budget alongside the financial impact budget?

Mr. Brennan

We can try to do that. While we have general figures, I do not know if it would be technically possible to get State figures. We will examine the matter. Does the Deputy think it would be possible to do that for the State?

Mr. J. Bruton

It would be good if we could show that for every €1 spent on rail subsidisation, there was a benefit to the environment of 7 cent, whereas for every €1 spent on road transport, there was either a negative impact on the environment or a benefit of only 1 cent. We should change the prism through which we look at the choices we are making. It seems that unless we can find some environmental prism through which the Estimates can be put, the wrong choices will be made in global economic terms because we are only looking at the financial effects.

Mr. Brennan

We might undertake a separate study. While it could be included in the Estimates, it would probably be more important than just tagging it on to an Estimates debate. We might do a study and publish the results because they would be interesting figures.

Deputy Glennon asked about the port tunnel. The current estimate of the cost is approximately

€600 million. The tunnel is due to be completed in January 2005. Approximately €150 million has been spent on the project to date. The original estimate was approximately €350 million.

Ms Shortall

We spoke about the cost overruns on the road building programme. I want to ask the Minister about the contracts awarded to consulting engineers under the NDP in relation to road building. I believe a figure of 4% is paid, irrespective of the cost of the project. If there is a considerable overrun, the fees will increase accordingly. Such contracts were criticised by the Comptroller and Auditor General in relation to the project at Abbottstown. Does the Minister have similar concerns about consulting engineers? If so, does he have any proposals to review such contracts?

Mr. Brennan

I have proposals, not specifically in relation to consulting engineers, but in terms of all the services remunerated on the basis of the final cost. It seems the incentive is wrong. If someone receives a certain percentage of the final cost, the incentive is not there to keep costs down. We must put a system in place. We are talking to the NRA about this issue. It has operated on the more traditional Construction Industry Federation contract with the standard price variation clause which has been used for a long time, from which it is now beginning to move away to complete more projects on a design and build basis. The structure is usually the other way in design and build projects because there is a fixed price, a fixed time period and a fixed amount in fees. If the cost goes through that ceiling, additional fees are not paid. I support that approach. We must change the incentive for managers and designers in order that they get more the less the project costs, rather than more the more it costs. This has been deeply ingrained in construction contracts for many years.

Chairman

On behalf of members, I thank the Minister and his officials for appearing before the committee and answering our questions. It has been an informative meeting.