SELECT COMMITTEE ON TRANSPORT debate -
Wednesday, 12 May 2004

Vote 32 - Department of Transport (Revised) (Resumed).

Acting Chairman (Mr. P. Power)

The purpose of today's meeting is to resume consideration of the following Revised Estimates falling within the remit of the Department of Transport: Vote 32, Office of the Minister for Transport, subheads C, D and E. I again welcome the Minister for Transport, Deputy Brennan, and his officials, Mr. John Fearon, Mr. Dan Commane and Mr. Derek McConnon. Apologies have been received from Deputies Shortall and Naughten. We will proceed through the subheads not addressed when we adjourned last week, beginning with subhead C. Is that agreed? Agreed.

Are there any questions on subhead C, public transport?

Mr. P. Breen

What are the costs for the mobilisation of the Luas in 2004? In 2003 this came to €5.6 million.

Minister for Transport (Mr. Brennan)

As I explained on the previous day, the underspend in 2003 was due to delays in the construction programme, which in turn led to the mobilisation programme being behind schedule, which has now been caught up with significantly. There has been a significant increase in the mobilisation costs of infrastructure in excess of €5 million. I presume that is the figure the Deputy was seeking. A further sum of €1.6 million relates to infrastructural maintenance. If that is included, the total figure is approximately €7 million in mobilisation costs for Luas.

Mr. P. Breen

The Estimate for the railway commission in 2003 was €2.1 million. Why has the sum been reduced to €1.7 million in 2004?

Mr. S. Brennan

It is the result of the timing of the coming into place of the statutory railway safety commission. As members know, the Railway Safety Bill is before the Dáil. I hope to move to Report Stage in the next few weeks and to conclude consideration of the legislation before the summer recess. As the statutory commission has not been in existence, the timing of supplying funds is affected. The 2003 Estimate was set at €2.194 million on the assumption that the sum would meet the full year costs of the commission. As the commission was not established that year, no funding under this subhead was required. The Estimate for 2004 was €1.7 million on the assumption that the commission would be established in the spring and require funding for 12 months.

In any event, the commission has yet to be established. It is hoped to enact the necessary legislation before the summer recess to allow us to establish the railway safety commission formally on a statutory basis in July 2004. It is a timing issue.

Acting Chairman

As there are no further questions on subhead C, we will consider subhead D, civil aviation.

Mr. P. Breen

Subhead D2 deals with public service obligations, or PSOs, which are very topical. The cost in 2003 was €20.6 million and the Estimate for 2004 is €17.8 million. Why is the PSO figure for Knock Airport so much greater than it is for Galway and Donegal? Is it the intention of the Minister to phase out PSOs over the next few years?

Mr. S. Brennan

It is not my intention to phase them out. It is intended to conduct a formal review next year of the PSO system. The Deputy is quite right to point out that the subvention per trip for Knock is more expensive. It is now €224 per one-way trip. The corresponding figures are €55 for Kerry, €51 for Galway, €80 for Sligo, €80 for Donegal and €77 for Derry.

The Knock Airport subvention is substantial. In fairness to Knock, passenger numbers are lower which means the subvention per head is naturally substantially higher. The dependence of Knock Airport on PSOs is reducing. It is doing substantially better now from non-PSO sources which are now 70% of its business. That has also been the experience in Kerry. While dependence on PSO is reducing, the subvention continues to be very expensive from the point of view of the State. Of the total passenger throughput at the regional airport in Knock, 6% are PSO passengers. Therefore, 94% of passengers are non-PSO. It is greatly to the airport's credit that it was able to bring that about.

Mr. P. Breen

Does the Minister see the €224 figure being reduced?

Mr. S. Brennan

Of the 247,000 passengers who came through the airport last year, 6% were PSO. There is probably not much scope, given the 6% figure, to push it much tighter. The percentage is greatly to the airport's credit. The corresponding figure in Sligo is that 99% of all passenger journeys are no longer public service obligations. The money to pay for the subvention comes from taxpayers rather than from Europe, contrary to what appears to be the impression of many. In Kerry 27% of journeys are PSOs. The figure in Galway is 72%, Derry is 14% and Donegal is 77%. In that context, Knock has developed its business impressively. I was there recently to open an extension to the terminal building. A few days before I arrived, the airport had sent a chartered flight directly from Knock to Cape Town. It is proposed to do so on a regular basis. It is to the airport's great credit and I encourage all regional airport's to learn from it.

Mr. P. Breen

Does the Minister not see a significant disadvantage to Shannon Airport which does not have a direct flight to Dublin unlike the subsidised flights from regional airports?

Mr. S. Brennan

Anybody who wishes may apply to use the public service obligation system. It is only for internal flights and cannot apply to cross-channel or international flights.

Mr. P. Breen

I realise that. I am talking about the Dublin market.

Mr. S. Brennan

The system does not represent the future for Shannon. The Deputy knows my views on this matter as I have met him on many delegations. Shannon Airport has a positive future and will not need to avail of public service obligations. It will be well able to make a commercial go of all its operations.

Mr. P. Breen

The reality is that Shannon does not have a daily direct service to Dublin which the regional airports do. It has placed Shannon Airport at a disadvantage.

Mr. S. Brennan

The stopover flights are still in place.

Mr. P. Breen

They only operate one way. The timetable is not useful.

Mr. S. Brennan

I take that point. The new authority at Shannon Airport will have to address the matter and discover whether a Dublin business can be developed. As the Deputy knows, we are also developing motorways and railways. People make judgments as to whether it is useful to fly where motorways are in place. The investment in Shannon Airport and its size are such as to allow it to operate on a commercial basis. It will not need to take advantage of PSO business. The public service obligation system is aimed at the smaller regional airports, of which Shannon Airport is not one. It is a major international strategic State airport and is not in the same league.

Mr. P. Breen

It does not have a direct morning service to Dublin for business people, which it had up to two years ago. It is at a significant disadvantage compared with Cork which has a route serviced by Aer Arann. Galway, Knock and Donegal all have services. One can travel from Donegal to Dublin and return on the same day, but one cannot fly from Shannon.

Mr. S. Brennan

While I accept what the Deputy has said, no PSO money goes to Cork Airport, as he knows. Aer Arann does not receive State money to subsidise flights between Cork and Dublin. I am happy that the major State airports will be able to operate commercially.

Acting Chairman

If there are no further questions on subhead D, civil aviation, we will consider subhead E, miscellaneous provisions. If there are no questions on subhead E, we will consider the final subhead, subhead F, appropriations-in-aid. As there are no Deputies offering, I thank the Minister and his officials for attending to complete consideration of Vote 32.