SELECT COMMITTEE ON TRANSPORT debate -
Wednesday, 14 Jun 2006

Vote 32 — Transport (Revised).

Chairman

I have received an apology from the Minister for Transport, Deputy Cullen, who cannot attend for personal reasons. I welcome the Minister of State at the Department of Transport, Deputy Gallagher, and his officials, who are here to deal with consideration of the 2006 Estimates, Vote 32 — Department of Transport.

The purpose of today's meeting is to consider the revised Estimates for Vote 32 — Transport, which were referred to the committee by the Dáil on 23 February last. For members' information, the select committee will consider the Sea Pollution (Miscellaneous Provisions) Bill 2003 this afternoon, immediately after we have completed the Estimates. The Clerk to the committee has circulated a draft timetable, which we need not live with. However, if we are running out of time, that is the only way that we can proceed.

Members have suggested that they have already gone through the Minister of State's opening speech and that they do not wish to hear it read again. If that is so, we will move on to the various subheads, the first being A1 to A7 — administrative budget.

Minister of State at the Department of Transport (Mr. Gallagher)

I hope that it is fairly self-explanatory. The Estimate for subhead A1 for 2006 is €38.368 million against an outturn of €24.6 million in 2005. There is quite a substantial increase, of some 56%. That is the anticipated requirement for 2006 regarding the extra expenditure due under the final phase of benchmarking awards and Sustaining Progress. Another substantial part is owing to the transfer of the marine safety section from the Department of Communications, Marine and Natural Resources on 1 January 2006. Those are the main reasons for the substantial increase.

Ms O. Mitchell

Regarding subhead A7, consultancy services, I have no problem with the fact that there is sometimes a need for them. However, the increase is almost 100%, and given that we have published transport plans for the next ten years, should we not be past the consultancy stage and onto the commissioning stage? I wonder why there is such a large increase in spending on such services, although the sum is not huge in absolute terms. It is a large increase.

Mr. Gallagher

Subhead A7 relates to consultants providing payment for expert advice as regards the many complex issues which are beyond the normal resources of the Department and the Civil Service generally in circumstances where independent input is required. Consultancy and related studies also arise in respect of specific programmes funded through the relevant subheads. Consultancy costs undertaken by the RPA have been met at subhead C3 and other aviation consultancy costs undertaken by the Department have been met under subhead D4.

The increased provision in 2006 is very much in line with the 180 additional staff who transferred into our Department on 1 January. The Estimate for 2005 was €1.7 million. However, the continued monitoring of consultants in the Department was reflected in lower than anticipated costs in 2005.

Ms Shortall

On subhead A2, a portion of that increase relates to driver testers in the road haulage division. How many additional testers have been taken on? What is the present situation as regards waiting times for HGV drivers?

Following on from what Deputy Olivia Mitchell identified about the fairly massive increases as regards consultancy services, there is a whole industry now, it seems, which is costing the State a vast amount of money. There was a time when that type of expertise could be found within Departments. Arising from what we know about the current national wage agreement talks, I hope the Government will be facilitated in supplementing the resources of the Civil Service in the specialties and bringing in specialist expertise. It should be possible to find such people within the ranks of the Civil Service.

I am concerned that in addition to the massive amounts being spent on consultancy services, there are a number of agencies under the auspices of the Department, the commercial semi-State companies, for example, also employing consultants. I read today in the business section of the newspaper that Aer Rianta or the Dublin Airport Authority has brought in a whole army of consultants to advise on the break-up — as well as having its own supposedly expert advice within the company. It seems, as regards the break-up of Aer Rianta, for example — and presumably the same applies to Aer Lingus — that there are experts in house, and then the company brings in outside expertise and so does the Department. Overall, this is a massively expensive undertaking. What is the point of doing this? Is it for the sake of feeding the private consultants? Has the Minister of State any proposals at all to bring matters under some type of control? I should very much like to see the figures, specifically as regards Aer Lingus and Aer Rianta.

Mr. Gallagher

It may appear to be a substantial increase, but one has to take into consideration the transfer of marine safety and search and rescue personnel, the Coast Guard service etc. which involved an additional 180 personnel and accounts for a substantial part of the overall increase. I am the first to acknowledge that if all this expert advice was available within the Department, we certainly would not go outside. Another view is that it would be difficult to quantify the cost in monetary terms if we had to have all this expert advice in the Department. Perhaps the consultants are only called in when we are looking for independent advice. If such expertise was located in house, it certainly would cost substantially more than the proposed Estimate.

I should like the committee to recognise that the Department is cutting down on consultants where possible. We will monitor the situation closely. All of this includes the cost of specialist, financial, environmental and economic advice. We also outsource a significant amount of our internal audit work along with the technical and financial audits of investment projects. The Deputy is quite right in saying this specifically relates to the Department. The other agencies such as the NRA, Aer Rianta or CIE will obviously have reason to hire consultants from time to time. However, I take the Deputy's point. It seems a substantial increase, but it must be borne in mind that this is an exceptional year — going from what was the old Department of Transport to the Department that incorporates marine safety.

Just to give the Deputy some facts, as I said, we were cutting back on this area. In 2003 the figure was €3.5 million, in 2004 it was €1.4 million, in 2005 it was €1.7 million and this year it will be €2.1 million. This is an exceptional year, however, and had we not had the transfer from the Department of Communications, Marine and Natural Resources, it possibly would have been lower than the €1.7 million required last year.

Ms Shortall

There are a number of specialist-type areas the Minister of State's Department needs. I think of engineering in particular, given the Department's responsibilities. What in-house engineering expertise is there in the Department? Also, what in-house economic expertise has the Department got and what is the situation as regards legal expertise? I have noticed in the legislation emanating from the Department in recent years that there are vast numbers of amendments tabled by the Minister on Committee Stage and again on Report Stage. That certainly raises questions about the adequacy of the legal advice within the Department. Perhaps the Minister of State can give the committee some information on those three areas.

Mr. Gallagher

We do not have in the Department the specialist engineering advice we require from time to time.

Ms Shortall

Is there any?

Mr. Gallagher

There are some engineers on the marine side and others with the necessary basic qualifications. However, if we were to have that in-house advice all of the time, it would possibly be much more expensive. Despite consultancy fees being extremely expensive, in comparative terms it is possibly cheaper to do it this way. It is possibly something that could be looked at across the broad spectrum of the Civil Service and perhaps in the future we might be able to share expert advice with other——

Ms Shortall

Does the Department have any transport engineers at all? Are there any engineers in the transport section?

Mr. Gallagher

We have nobody in civil engineering in the transport section.

Ms Shortall

That is extraordinary.

Mr. Gallagher

The Deputy also asked me about the additional fees. She referred to a topic we discussed on many occasions, and rightly so, namely, the driving tests. Now, as the Deputy will be aware, the bonus scheme is in operation.

Ms Shortall

I asked the Minister of State about HGV driving tests.

Mr. Gallagher

The figures I have relate to the general driving tests. I shall try to get that for the Deputy. When we refer to waiting lists it is an all-encompassing figure.

Ms Shortall

Under subhead A2, part of that increase, it says in the briefing document, relates to private testers, road haulage. Are they two separate things? It does not relate to driver testers in the road haulage area.

Mr. Gallagher

They are two separate things. Yes, the road haulage is somewhat different. It is to assist the Irish road haulage industry. The fact that it is organised and represents its members is advantageous for us. It is a two-way street whereby we can assist the road haulage industry. In the past the industry has not drawn all of the funds that would normally be available to its members. The checking of the tachograph must be done for road haulage vehicles to ensure that the weights conform with regulation.

Chairman

Are subheads A1 to A7 agreed? Agreed. The next subheads are B1 to B3, which deal with roads.

Mr. Gallagher

The purpose of this subhead is to provide a block grant to the National Roads Authority to fund the construction, the improvement and the maintenance of our national roads. It also includes grants to the NRA for administration and for general expenses. It consists of three subhead items, broken down by improvement, maintenance and NRA administration. The NRA is responsible for the funding and programming of individual projects within the strategic framework for the national roads programme, as we have set out in the national development plan.

The programme includes the upgrading of five major inter-urban routes to motorway or dual carriageway standard and major improvement works to other national primary routes. Under this subhead, grants are provided by the NRA to the local authorities for the improvement and maintenance of national roads. National road maintenance includes re-surfacing, the day-to-day maintenance and the winter maintenance of the national primary and secondary routes. Under the Roads Act 1993, the Department does not have a day-to-day supervisory role in the work programme for national roads, individual projects, or in the allocation of funding to projects. This function is exercised by the NRA. The accounts of the NRA are audited by the Comptroller and Auditor General. The NRA is required to follow guidelines set by the Department of Finance and the Department of Transport in the appraisal of projects and cost-benefit analysis. The NRA reports on programme implementation to the Department.

Ms O Mitchell

I do not wish to be unnecessarily obstructive. Yesterday, we received the detail of the Estimate. I have had a full diary since then and unlike the Minister of State, we do not have advisers. It is difficult enough to make any sense of the information we are given, but it is even more difficult when we are given the outturn for 2005 and then told it is a 7% increase this year, when it really means that there was a 3% increase on what was estimated. It was a 7% increase on the outturn. We are told that the Department is owed what was not spent last year and it suddenly becomes a 15% increase. The reality is that there is no increase in productivity. It does not make any difference, as nothing more is done. However, it makes it much more difficult for us to understand what is being spent on behalf of the public.

Generally speaking, the presentation from the Department of Transport is much clearer than that of other Departments. However, the practice of talking about a 15% increase on the previous year is not comparing like with like. That raises the question of the extent to which the five major inter-urban routes are delayed. We knew that the original target date was 2006 and it was then accepted that it would take until 2010 to complete them. A recent story in the newspapers stated that it would take until 2015 to complete those routes. The story stated that there simply were not enough funds and this delayed the delivery of the routes. Can the Minister of State comment on the veracity of that story?

Mr. Gallagher

Can the Deputy clarify that?

Ms O. Mitchell

There was a story in the newspapers recently which stated that the five major inter-urban routes were delayed beyond 2010 owing to lack of funding. I would like the Minister of State to comment on that.

I would also like an explanation for the 50% increase in the administrative costs of the NRA. The written explanation is that it is owing to Sustaining Progress increases and benchmarking, as well as an increase in staff. Generous as benchmarking might have been, it certainly was not that generous. Much of the increase must be owing to an increase in staff. We are coming to the end period of the national development plan, as well as to the theoretical end of the delivery of the major inter-urban roads. Why do we suddenly need a 50% increase in the staff of the NRA?

My final question is on subhead B3. It seems that this is a very meagre budget for something that has been so much in the headlines in recent times. There has been a depressing number of road deaths, we have passed new legislation and set up a new Road Safety Authority. It may be that I misunderstand this sub-head and it is not about funding the Road Safety Authority, but the Minister is on record as promising a budget of €30 million and it is nowhere near that. There are different explanations for the increases. A payment was made to the SWS group to convert manual data on penalty points from the Garda Síochána and the courts to the electronic format necessary for the national driver file. We were assured by the Minister that this was happening automatically and that there was no need for a manual transfer. Why, therefore, did we sign a contract with SWS to do that?

When this Estimate was allocated at the beginning of the year, was it envisaged that the 35 extra penalty points would come on stream in April? Does the Estimate cover that? What provision is made for the budget of the Road Safety Authority? How can it possibly carry on its work with a meagre increase and half the budget originally intended?

Mr. Gallagher

The Road Safety Authority is not included in the Estimate. It will come out of the administrative costs of the Department because the staff are all being transferred from the Department to the Road Safety Authority and the National Safety Council.

Ms O. Mitchell

What about the budget to be spent apart from staff costs? We must bear in mind that the previous head of the National Safety Council resigned owing to the lack of resources being allocated to the council. It is one thing to move staff costs, but where is the funding for the work they will undertake, such as research and all the other things promised for this authority? The funding does not seem to be there.

Mr. Gallagher

I will deal with that under subhead B3. With regard to the administration costs of the National Roads Authority, there will be a seamless transition from the National Development Plan into Transport 21, which is now up and running. The National Roads Authority had a staff of 65 in 1999, while there will be a sanctioned staff of 124 in 2006. While that is an additional cost, it is a small price to pay for the additional works carried out by the National Roads Authority on our national primary roads. Most of those projects, if not all, are coming in on time and within budget. There is a beneficial effect and it is a good investment.

With regard to the major inter-urban routes and the report to which reference was made, my understanding is that there is no delay in this regard. The newspaper headlines of yesterday, suggesting delays until 2015 owing to lack of funding, were, to say the least, disingenuous. The report did not refer to 2015 or any lack of funds. It suggested there might be a delay until 2011 but this is not the case. We have checked the position with the NRA and everything is on schedule for 2010.

Ms O. Mitchell

That is good news.

Mr. Gallagher

I am glad to have the opportunity to clarify that point.

Subhead B3 is used to fund various initiatives with regard to road safety. It funds the Medical Bureau of Road Safety, the National Safety Council, the cost of monitoring the national car testing service, the cost of card-issuing associated with the digital tachograph, the cost of converting manual data from the Garda to an electronic format for transfer to the national driver file, which is the responsibility of the Department of the Environment, Heritage and Local Government, and the cost of the administration of the penalty points system. This subhead also funds the printing of driver licences and application forms, the printing of certificates of roadworthiness and the cost of essential stationery related to the operation of the scheme.

In the past the subhead included funding for the establishment and running costs of the Commission for Taxi Regulation, the cost of the advisory council to the Commission for Taxi Regulation and the costs arising from the taxi hardship payments scheme of 2003 and 2004. This subhead is an amalgamation of the 2005 subheads B3, vehicular and driver licensing expenses, B4, other road related services, and E3, National Safety Council.

Ms O. Mitchell

To go back to basics, how can we scrutinise these Estimates when as basic a body as the Road Safety Authority does not have an estimated budget that we can assess? We are simply told that a hodgepodge of services are provided for and that staff will be provided for under another subheading. It is very difficult to scrutinise spending in such circumstances.

With regard to the supervision of the NCT, I was surprised to note that there was a supervision services contractor. Did this arise from the review or is it an annual cost? If it is an annual cost, is it recouped from the provider of the service?

Mr. Gallagher

It is not customary to provide for the Road Safety Authority or any other body until it has a statutory basis. As the Deputy is aware, the authority now has that statutory basis but this year is a transition period and the budget for this year will be drawn from various parts of the Department's Vote, principally subhead A, relating to staffing costs, and subhead B3, which we are discussing at present. However, from next year it will be much easier to comprehend the position when the authority stands alone.

Ms O. Mitchell

I also asked about the NCT.

Mr. Gallagher

There is a provision of €780,000 for vehicle testing to meet the cost of the supervision services contractor engaged by the Department to monitor the performance of the NCT service and to ensure that the car testing service is being provided in accordance with the terms of the contract between the company and the Department. The supervision services contractor comprises a consortium involving PricewaterhouseCoopers and the Automobile Association and has available to it engineering, financial, legal, IT and operational expertise. The supervision services contractor is working to an agreed programme for the Department and the services are remunerated from a levy collected as part of the test fee payable by NCTS customers. The proceeds of the levy are paid to the Department and are then credited as appropriations-in-aid to the Department's account, which comes under subhead F11.

Ms O. Mitchell

Has that system been in place since the establishment of the NCT, or did it arise from the mid-term review?

Mr. Gallagher

It has been in place since the establishment of the NCT in 2002 but it formed part of the mid-term review.

Ms Shortall

Deputy Olivia Mitchell referred to the 50% increase in the cost of pay in the NRA. There has been a significant increase in the number of projects in hand at the NRA and that outstanding increases remain to be paid under the last two pay agreements. Apart from that, how many additional staff have been employed by the NRA? I welcome an element of the increased staff numbers because the NRA was weak in the area of budgeting and oversight of projects. I realise it has strengthened the economic side of its operation.

The Road Safety Authority budget allocation includes costs associated with the National Safety Council. Is the National Safety Council still in existence? Has it been subsumed into the non-statutory Road Safety Authority? If not, when is that likely to happen?

The Minister of State said the supervision of the NCT contract was funded by a levy on the NCT charge. What is the total amount which accrues from the levy? Does it meet the cost of the supervision of the contract?

Mr. Gallagher

Some 35 additional staff have been sanctioned for the NRA. Vesting day for the National Safety Council will be in the fourth quarter, towards the end of the year. It will then be subsumed into the Road Safety Authority.

Ms Shortall

Therefore, the National Safety Council will be gone by the end of this year.

Mr. Gallagher

Yes. The levy on NCT income was €1.438 million, which covers the cost of the service.

Ms Shortall

Is the Minister of State satisfied with that?

Mr. Gallagher

If all services broke even, we would be more than happy. The review, which will soon be available, will show a high rate of satisfaction with the NCT.

Ms Shortall

It is somewhat more than breaking even.

Chairman

Are subheads B1 to B3, inclusive, agreed? Agreed. We will now move on to subheads C1 to C3, inclusive, dealing with public transport.

Mr. Gallagher

Subhead C1 provides for the payment of an annual subvention to transport companies in respect of their provision of socially necessary but non-commercial transport services. The deployment of the Exchequer subvention is a statutory matter for the CIE board in consultation with its subsidiary companies. Since 2005, payment of a fixed portion of the subvention for each of the operating companies has been conditional on meeting certain performance criteria laid down in the memorandum of understanding, MOU, on service level and targets, which specifies the quality and quantity of services to be provided by each of the companies in return for Exchequer funding under subhead C1.

This subhead also provides funding for the rural transport initiative, which has been a major success. We intend to put this pilot project on a permanent footing and funding for it will increase progressively in coming years to a level four times the existing level.

Ms O. Mitchell

I would like to see a greater subsidy to Dublin bus, if it were provided with more buses. The Minister referred to the MOU on service level and targets, which specifies the quality and quantity of services to be provided. In general, subsidies should always incorporate some element of incentive to develop the service provided by the receiving body rather than being merely a residual to make up staff costs or costs arising from, for example, growing congestion. Does the subvention include some incentive to expand the service, or is it simply a question of quality and the numbers of buses and routes?

I am concerned that this subhead incorporates the rural transport initiative, a pilot project promoting the development of community-based public transport services. I am almost certain the Minister made an announcement earlier this year that this project had already progressed from a pilot to a mainstream basis. I understood this was done as part of the 2006 budget. Will the Minister of State clarify this?

Subhead C2 relates to public transport investment, a significant element of Exchequer expenditure. After last year's budget, the Minister indicated that certain projects would commence this year, including the extension of the Luas line to Cherrywood, the enhancement of the Kildare rail route and the construction of a rail station in Dublin's docklands. The Cherrywood extension has been through a public inquiry but has not been confirmed by the Minister and has not gone to tender. It is extremely unlikely it will commence this year. The Kildare route enhancement is only at the planning stage. I understand some track work is taking place in regard to the new docklands station but there is no prospect of the station being built soon because it does not yet have planning permission. Will any physical work take place this year on any of these projects, or are they all effectively at the planning stage?

The figure of €0.5 billion seems impressive but will it be spent on construction this year or simply held back and rolled forward in coming years? In particular, will funding be expended on those projects the Minister suggested would begin construction this year? He also indicated the joining up of the two Luas lines would commence this year but there seems no prospect of that.

Mr. Gallagher

The subvention to Dublin Bus does not include an incentive to grow the service because the memorandum of understanding makes clear its purpose is to cover the public service provision. Any change in that would require legislation.

Iarnród Éireann was granted planning permission, subject to appeal, by Dublin City Council on 9 May for a new railway station in the docklands. This will facilitate increased western line services and the proposed Dunboyne-Navan rail link. Clearance and construction works are under way and there has been some track-laying activity. Providing planning permission is upheld, physical work could commence in the summer of this year. I expect it to be completed and the station in operation in the early summer of next year.

Ms O. Mitchell

Has the project gone to tender?

Mr. Gallagher

Track works have commenced——

Ms O. Mitchell

I understand that but what about the construction of the station?

Mr. Gallagher

I am not certain, it is a matter for Iarnród Éireann. I will check for the Deputy. I am sure the company is obliged to be compliant in these days of transparency and accountability.

Ms O. Mitchell

I am not convinced the money will be spent.

Mr. Gallagher

Setting aside some major imponderables, we are confident that the station will be operational by next summer.

The report of the inspector to the public inquiry into the Kildare rail project has been received by the Minister, Deputy Cullen. He hoped to attend this meeting but contacted members to explain his absence.

Ms O. Mitchell

He did not.

Mr. Gallagher

I will speak to members about it later.

Ms O. Mitchell

I read about it in the newspaper.

Mr. Gallagher

The Minister is considering the report of the inquiry as well as the submissions received in respect of the project. CIE has submitted its application for a railway order and the accompanying documentation. Subject to the granting of the railway order, construction is set to commence by the end of next year.

I refer again to the subvention to CIE, which has increased dramatically in recent years. We must provide a public bus service. The subvention has increased progressively from €41 million in 2000 to €64 million last year and almost €75 million this year.

Ms O. Mitchell

Did the Minister of State say that the extension of the Luas line would not start until the end of next year? Some €95 million is allocated for it this year.

Mr. Gallagher

Subject to the granting of planning permission, it is due to commence at the end of this year.

Ms O. Mitchell

Is the figure of €95 million in capital costs correct?

Mr. Gallagher

Is the Deputy referring to the extension to Cherrywood?

Ms O. Mitchell

This figure seems to refer to light rail in general.

Mr. Gallagher

The report of the inquiry into the Cherrywood extension is with the Minister and we hope he will make a decision on it in the near future.

Ms O. Mitchell

It must then go to tender. Surely there is no realistic prospect that €95 million will be spent this year?

Mr. Gallagher

This subhead covers the purchase of new rolling stock. It is not a stand-alone item but is all-embracing.

Ms O. Mitchell

What is the provision for light rail?

Mr. Gallagher

I can give the Deputy a breakdown of the proposed expenditure for 2006. The figure for the red and green lines is €9 million, while the estimate for the Cherrywood extension is €30 million. The Estimates for the docklands extension and the Citywest extension are €7 million and €5 million respectively, while the capacity enhancement on the red and green lines will cost €19 million. The metro north and metro west projects have been allocated €16 million and €2 million respectively. In addition, there will be miscellaneous capital projects and there is a provision of €6 million for the line which is to join the two Luas lines in the city centre.

Ms O. Mitchell

Hence, most of the provisions are for planning and preparation work.

Ms Shortall

Under subhead C1, in respect of subvention, the Minister of State has stated that the 11% increase is mainly owing to wage increases and traffic congestion. I refer to buses, on which the vast majority of people depend at present. The subvention rate is approximately 25%, which is significantly out of line with the rates in most European cities. Can the Minister of State outline his thoughts, or those of his Department, in respect of the level of subvention which should be provided?

Every year, the cost of congestion amounts to several hundred million euro for business and tens of millions of euro for the public transport companies. However, the level of subvention provided to the transport companies is exceptionally low by European standards. Does the Department intend to increase the rate over a period? Does the Department intend to move closer to the European average, which is approximately 50%?

As for capital investment, Dublin Bus is still owed 165 buses, which were promised under the provisions of the national development plan, NDP. Has the Department made provision for those additional buses before the NDP expires next December?

In addition, under subhead C2, a figure of €310 million for public transport safety development has been allocated. Can the Minister of State provide a breakdown of this figure? Moreover, a sum of €45 million has been allocated to the Dublin Transportation Office, DTO, which is quite staggering. This seems to be an extraordinary sum of money, with little to show for it. Is it intended to subsume the DTO into the promised Dublin transport authority on its establishment? The Estimates provided to members state that the DTO's expenses are expected to increase by 23%. How can this be accounted for?

Mr. Gallagher

I will provide a breakdown of the sum of €310 million. Allocations in respect of railway safety, rolling stock and upgrade works come to €102 million, €61 million, and €50 million, respectively. The allocations to Dublin Bus and Bus Éireann are €24 million and €15 million, respectively. This will facilitate progress in major infrastructural projects, including the introduction into service of 67 intercity carriages and the acquisition of a further 150 intercity rail carriages, which are due for delivery next year. Moreover, refurbishment of the original DART fleet will continue, planning and design work will commence on the Kildare route project and planning, and design work will commence on the Cork to Middleton railway line.

As for Dublin Bus, over ten years, Transport 21 will provide for the investment of €529 million in bus-related expenditure in the greater Dublin area. The Deputy asked about subvention rates. Six years ago, the level of subvention as a percentage of the overall cost was 5% and this has been increased to 25%. Although funding is made available, due process must be followed and a balance must be found in this regard. The subvention makes up for the shortfall in fares and it must be considered on a yearly basis. As demand for the service increases, the required rate of subvention falls.

The €45 million allocated to the Dublin Transportation Office is for traffic management grants and for quality bus corridors, QBCs.

Ms Shortall

As for the level of subvention, does the Minister of State believe it would be good practice to move towards the European average, accepting the need for due process, value for money etc.? On an ideological basis, does the Minister of State believe it is good practice for the public purse to fund a substantial amount of public transport? Does he wish to see the figure move closer to the European average level of 50%?

I also asked about the 165 buses which are still due to Dublin Bus under the provisions of the NDP. Will they be made available before the end of 2006? Under the heading of public transport safety and development, the Minister of State mentioned a figure of €24 million for Dublin Bus. What exactly is that figure for?

Mr. Gallagher

The Department has received an application from Dublin Bus for 200 buses. I hope there will not be any procrastination in this regard and a decision on the additional buses will be taken in the near future.

As for moving to the European model, if this is considered in a cold and calculating manner, the provision of this service is financed by a combination of the fares and the subvention rate. Although all would wish that little subvention would be required and that the services could be self-sustaining, that is not in the nature of such services. While the Government has an obligation to provide a service, it must meet its public service obligations. Hence, rather than sending out a signal that the subvention rate will be increased until reaching a rate of 50% in adherence to the European model, this issue must be examined over a multiannual period.

Ms Shortall

When people travel abroad, most marvel at the public transport systems in other European cities. This is true in most cases, and is certainly true of the main cities. Does the Minister of State accept that the reason they have such good transport services is because the relevant state meets a substantial amount, namely, 50% of the cost, and that Ireland will not acquire decent public transport services until the subvention rate is increased?

Mr. Gallagher

The Government and the Department are anxious to have a service in Dublin which is comparable to that in cities of a similar size in the rest of Europe. While this can be an aspiration, it must be considered on a phased basis. An indication of the Government's commitment to so doing can already be found in its actions. The subvention rate has risen from 5% of the overall cost to 25%. If further funding is required, the process must be followed. We will try to achieve the 50% objective. I am not in a position to address the matter yet.

Ms Shortall

I ask the Minister of State to comment on the future of the Dublin Transportation Office.

Mr. Gallagher

I cannot speak categorically on the issue. A decision will need to be taken. It may be that it will be subsumed into the Dublin Transport Authority, as is the case of car safety with the RSA. It is a matter we will consider.

I am glad the Deputy raised the matter of rural transport, which has been very successful in the pilot. As the Deputy correctly pointed out, the Minister announced his intention to put the rural transport initiative on a permanent footing shortly after completion of the pilot at the end of 2006. In early 2006 the Department commissioned an independent study to develop policy issues including a preferred option for the permanency of the RTI from 2007 onwards. In areas where rural transport is available I hope a seamless transition will take place from the pilot to the permanent scheme. I hope that as early as possible in 2007 the initiative can be rolled out to the rest of the country. In Transport 21 the Government committed to provide what we believe will be adequate funding to ensure that the service can be operational by 2007.

Chairman

Are subheads C1 to C3, inclusive, agreed? Agreed.

Mr. Gallagher

Subhead D1 deals with aircraft accident investigation insurance and provides for the cost of two aviation insurance policies. The first one is to indemnify the Minister and the IAA against the cost of claims by third parties for damages arising from aviation-related incidents deemed attributable to negligence on the part of the Minister or the authority in the exercise of their aviation-related functions. It also indemnifies the Minister against costs incurred in the investigation of aircraft accidents. The air accident insurance premium of €460,000 was paid in January 2006 and was €26,880 more than anticipated. The premium in respect of aviation liability policy and access policy public liability, which is war risk, is expected to be €120,000 for 2006.

Subhead D3 deals with regional airports to which funding will increase substantially in coming years. The outturn for 2005 was €1.7 million for capital and €21.4 million for current, which is the big one. The capital will increase by 500% and current spending will fall by 25%. However, this will not represent a reduction in services to the regional airports. Some regional airports will have an increase in services. My local airport in Donegal has a red-eye service and another in the middle of the day. Last year the Department advertised and found that owing to efficiencies it was possible to provide the same or improved services for less money.

The members may wish to deal with the remaining subheads individually, including the exempt payments, which come to €3.8 million this year. Subhead D4 relates to the miscellaneous aviation services of approximately €600,000. Subhead D5 relates to North-South co-operation. Last year no funding was allocated to the subhead and this year it has €4.5 million, as the Department is in consultation with its counterpart in Northern Ireland, which has responsibility for the co-funding of the City of Derry Airport.

Ms O. Mitchell

I welcome the additional funding to the regional airports in 2006. Will that money be drawn down in the current year? I would have thought that the regional airports were making considerable demands for funding. However, last year's outturn showed a carryover of €2.5 million, which was twice what they spent, if I am reading the numbers correctly. Will they be able to draw down the €10 million in the current year if they could not draw down what was allocated last year?

Regarding the current spending, I have a question on the public service obligation contracts that were signed last year, I believe. In some cases the subsidies per passenger seemed to be reasonable. However, when I inquired further, the passengers carried had diminished greatly. Is the public service subsidy connected in any way to the demand for the service? It is possible to get a good deal from a carrier who transpires not to be carrying very many passengers. We should have a two-pronged approach through subsiding regional policy and also ensuring that the service provider offers the kind of service that attracts passengers. If the service is not what people want, it will not be used.

Subhead D3 is by now almost an old chestnut. In its first year, I referred to it as the Irish contribution to the Iraq war effort. It is very hard to take that we are paying out money to an Irish organisation, the Irish Aviation Authority, to pay for the navigation services to the US airplanes servicing Iraq. It is hard to understand how the figure continues to increase — it has risen by 21% for 2006.

The war has been over for a number of years. Whatever about offering our support while a war was ongoing, we are now hearing that the Americans are pulling out and winding down the effort in Iraq. It is hard to understand how it is costing us more money now than it did in the past to provide navigation services to the US Army. It is hard to reconcile what is going on in terms of rendition and even requests to see passenger lists with our paying money for their navigation services. How much longer will this continue? While I recognise that an income to Shannon arises from this activity, on the other side of the balance sheet the taxpayer is paying.

Mr. Gallagher

I welcome the Deputy's commitment and support for our regional airports. This year's budget is €10.5 million. I realise that last year's funding was not fully drawn down. We will have a new scheme in operation soon and will invite applications from the various airports. Since 9 September 2005, we have had new EU guidelines on the financing of airports. They require us to revise the existing arrangements for subventing capital and current expenditure at our regional airports.

We have approved, in principle, the scope of the two replacement schemes and discussions are taking place with the European Commission with the aim of finalising the details as soon as possible. The proposed capital expenditure grant scheme has been formally notified to the Commission for clearance and we hope to receive a positive response soon. If we do not get it by June or July, that will be tantamount to our not receiving it until September, which is quite late. We could have a similar situation in which there would not be a full drawing down, but that would not be a reflection on ourselves or the airports. We hope we will receive clearance. We are getting positive signals in that respect.

The proposed capital expenditure subvention scheme will replace the national development programme capital expenditure grant scheme's first two rounds. This scheme will provide the basis for the application of the funding provided in Transport 21. I hope we will be in a position to do so after we receive a favourable response from the Commission. We are ready, upon receiving that response, to launch the new scheme and convey decisions in principle on the 2006 to 2010 funding to the regional airports by the end of the year. We are running against the clock. If the airports do not draw down all of the €10.5 million, I hope they will avail of a substantial part of it.

There is a significant demand for the service. The one with which I am most familiar is a microcosm of what is happening in the rest of the country, namely, the public service obligations that apply in counties Kerry, Galway, Sligo, Donegal and Derry and at Knock. In recent years, there has been a substantial increase in the number of PSOs. The number for Kerry has more than doubled since 1999, that for Galway — which has one less service — has almost trebled in this respect, Sligo has increased by 50%, Donegal's number increased by just over 100% and Knock's increased by 2.5 times. Those are the PSO airports and——

Ms O. Mitchell

When airlines tender in this regard, are they awarded lump sums or is it based on numbers of passengers carried?

Mr. Gallagher

It is a formula relating to passengers carried. Obviously, the higher the demand——

Ms O. Mitchell

The more they receive.

Mr. Gallagher

Yes. There is an incentive.

The Deputy inquired about the IAA. An obligation has been placed on it and we must comply with international rules. We have no choice but to pay.

Ms O. Mitchell

An increase of 21% in flights was envisaged. Given that we are midway through the year, is there evidence that this increase has come to pass?

Mr. Gallagher

I do not have that information; we draw comparisons much later in the year. It was projected that an increase of up to 21% could be required.

Ms Shortall

I assumed that consultancies in respect of Aer Lingus and Aer Rianta would be included under subhead A7. However, they appear in subhead D4. The figure shows an increase of €382,000 since last year. Will the Minister of State break this figure down between Aer Lingus and the Dublin Airport Authority? Does he have any details at his disposal in respect of the contracts, to whom they were awarded and their value?

Mr. Gallagher

The substantial increase for 2006 relates to the restructuring of the State airports, which will not occur every year. I am advised that we could require such an increase in funding this year, from €181,000 to €615,000.

Ms Shortall

It seems that more will be spent——

Ms O. Mitchell

Rolling it forward.

Ms Shortall

——on consultancies before the Department determines how to do the impossible. I asked the Minister of State to provide a breakdown in respect of consultancies relating to the Dublin Airport Authority and those relating to Aer Lingus.

Mr. Gallagher

All of the figure relates to Aer Rianta. We do not know what the Aer Lingus figure will be.

Ms Shortall

All of the increase relates to Aer Rianta.

Mr. Gallagher

The total allocation.

Ms Shortall

The brief states that the purpose of the subhead is to address all aspects of the restructuring of the State airports and expenditure on consultancies relating to Aer Lingus.

Mr. Gallagher

It does not include the funding required in respect of Aer Lingus.

Ms Shortall

What is the total spent on consultancies?

Mr. Gallagher

I apologise. The expenditure for Aer Lingus will be covered by this figure, but we do not yet know what the consultancy fees will be. I will not be able to provide the Deputy with specifics in that regard until later.

Ms Shortall

The Department has budgeted for an additional €382,000.

Chairman

Are subheads D1 to D5 agreed? Agreed. Subheads E1 to E4 relate to maritime issues.

Mr. Gallagher

Subhead E1 provides for the expenditure of the Irish Coast Guard, the operations of which include the maintenance of a helicopter marine emergency service at four bases located in Shannon, Sligo, Waterford and Dublin. We also require funding for the voluntary services of the 54 coast guard stations on our coastline and grant aid to the mountain and cave rescue teams and the inland teams that operate community rescue boats. There is also provision for a pollution salvage response programme and incidental matters. The Irish Coast Guard maintains, upgrades and expands a marine radio communications network for commercial, marine and inland search and rescue.

Subhead E2 provides an Exchequer grant towards the costs of the Commissioners of Irish Lights, a small contribution to the Royal National Lifeboat Institution, RNLI, the Marine Institute — weather buoys — making provision for the Adventure Activities Standards Authority and Ireland's obligation under the Loran agreement on marine navigation. The subhead also provides for an allocation to the marine casualty investigation board and for the payment of the national development plan grants to applicants other than port companies operating under the aegis of the Department.

Ms Shortall

On subhead E1, is it the intention to retain the four bases, the voluntary services, including the mountain and cave rescue teams and so on, and the other rescue services? Are there proposals on what the Minister of State might call rationalisation?

Mr. Gallagher

I presume Deputy Shortall is referring to the four search and rescue helicopters. We streamlined and synchronised the contracts with the successful company. Heretofore, contracts were coming to an end at different times but we have now made an arrangement where they are coterminous. This contract is for three years, after which it will go to tender again to ensure that the best price and service are obtained.

Some 55 Coast Guard stations and 1,000 voluntary members make a major contribution at sea, on mountains and cliffs and in inland waterways. At Kilmainham last week, the RNLI made presentations to those who have served it well in the past. The major expenditure of the institution is the cost of vessels, their maintenance and the retention of crew members. The contribution made by the Department is negligible, which shows the success of the RNLI and the level of voluntary subscriptions made by the public. I thank the general public for its major contribution. I will shortly have the opportunity recognise the importance of the RNLI and visit its headquarters in Poole, England. We intend retaining all search and rescue facilities.

Ms O. Mitchell

Reports earlier in the year suggested the management of the search and rescue services was to be transferred from Dublin to Valentia because a consultancy study recommended rationalisation.

Mr. Gallagher

The Irish Coast Guard headquarters and the marine safety directorate will be transferred to Drogheda as part of the decentralisation programme. It has been identified as a phase 1 project and the OPW is seeking to identify a suitable site in the Drogheda area. We hope to complete the move as quickly as possible but I do not yet have a timetable. It will become clear once a site is acquired. Following the transfer of functions to the Department of Transport, including the marine safety directorate and the Irish Coast Guard, current and proposed arrangements for the delivery of services will be reviewed to provide closer integration of these functions within transport policy in the Department. As part of the review the Irish Coast Guard, management will finalise its assessment of the needs of the rescue co-ordination centres and plan for development. The 24-hour, seven days per week services at Malin Head and Valentia will remain. I hope to receive a report on the review and will share its recommendations with the Deputies.

Ms O. Mitchell

Can the Minister clarify which services are being transferred from Dublin to Valentia?

Mr. Gallagher

The services are already there.

Ms O. Mitchell

They are being moved from Dublin to Valentia and the Dublin service will close.

Mr. Gallagher

With modern communications, we can provide the same service from Valentia or Malin Head.

Ms O. Mitchell

Which service is it?

Mr. Gallagher

It is a 24-hour, seven days a week service that co-ordinates reports of incidents at sea and calls out to other rescue services.

Ms O. Mitchell

The Dublin staff members are less than delighted with the prospect.

Mr. Gallagher

I am glad to hear that.

Chairman

Are subheads E1 to E4 agreed? Agreed. We can now address subheads F, miscellaneous, and G, appropriations-in-aid.

Ms Shortall

I take it that the figures in subhead F2 are expressed in thousands of euro.

Mr. Gallagher

Subhead F2 refers to payment of grants to CIE in respect of redundancy compensation.

Ms Shortall

Are the figures expressed in thousands of euro?

Mr. Gallagher

Yes.

Chairman

Are subheads F and G agreed? Agreed. I thank the Minister and his officials for attending this meeting and assisting in our consideration of the Revised Estimates.