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SELECT COMMITTEE ON TRANSPORT debate -
Thursday, 25 Nov 2010

Vote 32 – Department of Transport (Supplementary)

I welcome the Minister for Transport, Deputy Dempsey, and his officials, Mr. John Murphy, assistant secretary; Mr. Fintan Towey, principal officer; and Ms Doreen Keaney, principal officer. The purpose of the meeting is to consider the Supplementary Estimate for the Department of Transport - Vote 32.

The Department requires a technical Supplementary Estimate of €1,000 arising from the requirement to reallocate funding in its Vote. The gross sum required in the Supplementary Estimate is €21,389,000 which is offset by savings of €21,338,000, leaving a net figure of €1,000. The additional funding is required for the following areas: the Railway Safety Commission - administration and expenses; National Transport Authority; regional airports; maritime - administration and Irish Coastguard. Savings have arisen in the following areas: road improvement and maintenance; Road Safety Authority; carbon reduction measures; public service provisions, that is, the CIE subvention; and cross-Border initiatives. I shall briefly outline the reason for these necessary adjustments.

An amount of €400,000 was provided this year under the Department's Vote 32, to meet the running expenses of the RSC, which was established on 1 January 2006. The increased allocation of €600,000 is required to provide for additional resource requirements the RSC faced in continuing its mandate in 2010 and included significant work associated with the investigation into the Malahide viaduct collapse in August 2009. Funding for the RSC is provided in part by the Exchequer and in part by a levy on the railway undertakings.

The National Transport Authority, NTA, was established in December 2009. It began a very intensive process of change and taking on new statutory functions, which is ongoing. The Dublin Transportation Office, DTO, was absorbed into the National Transport Authority on 1 December 2009. The budget for the operation of the NTA comprises the budget allocation originally provided for the DTO amounting to €1.012 million. The DTO also received a further amount of €1.3 million in 2009 from Exchequer funds via a range of transport agency sources.

Since its establishment, the NTA has assimilated most of the major functions proposed in the Dublin Transport Authority Act 2008 and many of the functions of the Public Transport Regulation Act 2009. Agreement was reached with the Department of Finance that the DTA's chief executive officer-designate would be recruited and then detailed staffing and budget projections developed in consultation with the CEO. Discussions on final staffing levels took place within the broader parameters of the employment control framework for non-commercial state bodies.

The revised allocation for the National Transport Authority is €3.608 million, an increase of €2.596 million on the original allocation of €1.012 million. The €4 million capital savings being transferred from subhead B5, carbon reduction measures, is necessary to address the immediate funding difficulties of the regional airports, arising from greater operational losses than the Department was able to subvent from the resources available for this year's core airport management operational expenditure, OPEX, scheme. That provides for an annual subvention in respect of expenditure by the regional airports in providing core airports services. The amount of subvention payable in any one year is based on projected losses by the airports in providing those core services, after taking account of any surpluses from commercial activities such as catering, car-parking and any other sources of income available to the airports. This is in line with the view underlying the mandatory EU guidelines on State aid for the sector, that, as a general rule, airports should be self-financing and that public money should be made available to them only in particular circumstances and subject to certain conditions.

This year, a number of developments in the aviation sector have impacted on regional airports. Passenger numbers following the bad weather in January and the volcanic ash crisis in April and May were slow to return to normal with the continuing downturn in the economy. This was exacerbated by Aer Arann going into examinership last August. While fortunately Aer Arann has recently exited examinership, significant moneys have had to be written off by the airports under the agreed scheme of arrangement for creditors. Most particularly, the shortfall in the allocations made earlier this year under the OPEX scheme has put the regional airports under serious financial pressure. Two of the airports have indicated that unless funding is provided as soon as possible, they will have to review their position. The additional funding will enable the Department to subvent the airports' losses as provided for under the scheme.

Members will be aware that we have a value for money review of Exchequer expenditure on the regional airports programme, including the OPEX scheme. It has been completed and is at present being considered by Government. In the light of that review, decisions on funding for regional airports in future years will be made in the context of the Estimates and the budget. .

Another heading deals with maritime administration and the Irish Coast Guard. Under the 1985 cost-sharing agreement with the UK Department for Transport, Ireland is obliged to pay a fixed percentage of the expenditure incurred by the Commissioner of Irish Lights, CIL, in any year. Under the revised cost sharing formula agreed in May 2009, it was agreed that 85% of CIL's expenditure would be attributed to the Republic, of which we would pay 50% less light dues collected here. The reallocation of funds is required to meet Ireland's contribution for the CIL financial year 2009-10, which is now due.

The additional allocation under the Irish Coast Guard heading is necessary to settle a matured liability due on commencement of the production of the new build S92 helicopter in relation to the Irish Coast Guard search and rescue service. The new contract required an up front capital payment to achieve a reduced monthly standing charge. It is against the build of a new S92 for use by the Irish Coast Guard for ten to 13 years.

On savings arising in 2010, subhead B1 - the regional and local road grants was reduced by €0.812 million in 2010 to reflect the fact that seven local authorities were no longer being required to pay a total of €812,500 in contributions to the Dublin Transportation Office. This was equivalent to their combined 2008 contributions to the DTO. Instead, the intention was for the Department to pay this amount directly to the National Transport Authority. A similar situation applied to the contribution of €52,000 which the National Roads Authority used to pay to the DTO. That again was incorporated into the Department's direct contribution of €1.3 million to the NTA.

On subhead B3, the Road Safety Authority, a memorandum of understanding between the RSA and the Department was agreed in September 2010. In that memo, the RSA advised that a capital reserve had been created from fees income to fund the RSA's three-year capital programme 2010-12. It was also agreed that if fee income exceeded the €15 million, the RSA would reduce the monthly Exchequer drawdown request by the excess amount. The reserve was exceeded by €986,000 in October and €1.535 million in November. The Exchequer drawdown has been and is being reduced accordingly.

Capital savings occurred under subhead B5 - carbon reduction measures as a result of cost reductions on projects such as those associated with progressing scoping work for a national cycle network and the need to reschedule aspects of projects such as for the Sutton to Sandycove cycle route. The allocation to the National Transport Authority from the CIE subvention was equivalent to the C!E contribution to the Dublin Transportation Office, €333,000 in 2008. The NTA took over the functions of the DTO in December 2009. The funding was required for necessary set-up and administrative costs. Capital savings in subhead F3 cross-Border Initiatives relate to funding for the A5 Derry to Aughnacloy Roads project which will not be drawn down in 2010.

I reiterate that this is a technical Supplementary Estimate which I commend to the committee.

I welcome the Minister and his staff, and compliment him on looking for only €1,000 extra. It is pretty fancy accounting footwork to get the Supplementary Estimate down to a mere €1,000 at the present time, so well done in that respect.

I thank the Deputy.

It seems, however, that all the surpluses in the other areas seem to fit in very nicely in relation to the new subheads on which the funding has been divided. I have one or two questions on some of the subheads. In relation to the Railway Safety Commission, we discussed the Malahide viaduct report recently in this committee, and the additional funding of €600,000 appears to have been a very costly exercise. Will the Minister give some indication as to how the money is divided out, what contribution was made by the Exchequer to the cost of the Railway Safety Commission, in operations, and what was contributed by Iarnród Éireann? Will he say what the overall cost of the report was and whether there are ongoing costs for the Railway Safety Commission in implementing its recommendations? Fourteen of the 15 recommendations were directed at Iarnród Éireann.

Savings were made as a result of the transfer of functions from the DTO to local authorities, the National Roads Authority and CIE. Was the money transferred to the NTA, which has been exercising the functions of the DTA and DTO? What savings have been made since the NTA came into existence and assumed these functions?

I understand the taxi regulator will come under the auspices of the NTA on 1 December. How will its allocation which is in the region of €20 million be dealt with? Will it be necessary to introduce a Supplementary Estimate to transfer that money to the NTA and, if that is the case, why is it not being done now?

I am concerned in particular about regional airports. The Minister has apparently taken up the operational losses and the debts that have been incurred, a figure in the region of €4 million, some 25% of their subvention up to this time. These debts were incurred by the air services that were being provided. Was there an obligation on the Department to do that? Will the Minister explain the responsibility, if any, that rests on the Exchequer to pick up the tab for these services?

In his statement, the Minister stated that two of the regional airports indicated to him that their viability would be somewhat at risk if this was not done. Are we facing an appalling vista next year should, as indicated, the budget for air services be reduced by €5.5 million and the allocation for capital subvention is only €2 million? The budget for 2011 will be €11.5 for the entire year, in contrast to the €20 million allocated for this year. At the very best, there will be a reduction of 25% on the Estimate for last year or 50% almost on the actual outcome this year. Is that not the death knell of the regional airports? It would almost seem that Mr. Michael O'Leary has won on this issue, if that amount of subvention is withdrawn, considering that two of the airports have indicated that they are in a particularly difficult situation and would not have been able to continue with the present level of subvention. If the Minister were to withdraw the amount indicated in the national recovery plan, surely that is the death knell for some of the regional airports. I would hate to see the entire air service being gobbled up by Ryanair because if that is the case, the country will not get the required service.

With regard to the maritime administration of the Irish Coast Guard, we seem to have got a particularly bad deal after the reassessment with Irish Lights, if we are paying 85% of the costs and the UK administration is paying 15%. I presume the majority of the lighthouses are in the Irish part of the Irish Sea and around the Irish coast but will the Minister give an indication of the total sum, breaking it down to the figures that the UK government and the Government are paying?

I am also fascinated by the provisions for pension payments. How many pensions remain to be paid to the former staff of Irish Shipping and to the veterans of the Second World War? I had not realised we were part and parcel of the Second World War, but one learns something new every day.

We propose to purchase a helicopter, for which there is an up-front cost in the Supplementary Estimates, but what is the total cost of the S92?

Under the final two subheads, we have had to make a substantial provision for our failure to achieve the required level of carbon reduction. I know that it is a priority to get more people cycling to work and so on but the transfer of €12.682 million, a very large sum, to another subhead raises questions. What is the total budget? Why did projects that would have enabled us to spend that money on cycling, such as the national cycle network, and for example, the Sutton to Sandycove project, not go ahead? I know that in Dublin Central, progress was not made because the project was very badly managed, for example I know that the allocation for the East Wall-North Wall areas was to provide for the construction of a bridge among other things, but the proposed location of the bridge was precisely in the area where the work on the DART interconnection will be conducted, and the life span of that project is nine years and all the tunnelling is taking place on the road on which the cycle lane was being located. It would have been madness to put in a cycle lane, to shift the bridge and to put in a new bridge, so naturally the residents were up in arms. The proposals were badly presented by the local authority and the project did not go ahead. It would have been madness to spend that money because there would be no cycle lane for at least ten years. Had it gone ahead the cycle lane would have been ruined by trucks coming into the area and one would have to start again from scratch. This project was part of the Sutton to Sandycove route. I would like to know the reason for the delays in other areas.

I am very interested in the Border initiative and there seems to be a figure in the national recovery plan for up to €500 million to be invested in a road between Aughnacloy and Derry. I know commitments were made in the Good Friday Agreement . We are dealing with the IMF and the country is going down the tubes so how can we possibly deliver on an investment of €0.5 billion in a road between Aughnacloy and Derry? Is it not sufficient that we do our share of the road up to the Border and that Northern Ireland, which has the backing of the United Kingdom, would do the remainder? The UK is prepared to provide bilateral funding to pull us out of this crisis. We should not be borrowing a large chunk of money to build the roads for them when we cannot spend it on our own roads. There has been a delay and that is the reason the €6.1 million has become available, but surely there should be some reassessment as to whether this State can fund the commitment and if we are in negotiations with the IMF, is it not about time we negotiated with the UK on this stretch of road?

To follow the point made by Deputy Costello, I compliment the Minister and the Department on the wonderful accounting, where we need only an additional €1,000.

I am concerned about the potential cost for the regional airports. I have raised the necessity to take a strategic look at airports in Ireland. Anybody who is familiar with airports knows there is an airport in each county on the western seaboard. I have little doubt but that the existence of and support for so many airports is having an effect on the potential growth of the bigger ones. Whatever Administration is in place should decide to take a critical look in this regard. When one considers the improvement in the road infrastructure and the plans to extend the western rail corridor and the Atlantic corridor, it seems ludicrous to continue to support smaller airports that can be used by carriers such as the previously mentioned one to create unfair competition for the main airports in the State. A critical eye should be thrown across this issue and a decisive decision taken that some of these airports will not be supported to the same level as heretofore. They should be allowed to compete effectively and efficiently. While this issue may be for another day, I wished to make that comment.

As for the air-sea rescue services, this is money well spent. I am familiar with the facilities based in Shannon, County Clare and the new helicopter in training there is one of the most advanced available and will have the potential to provide significant assistance. Individuals within the HSE and the Department of Health and Children are considering the possibility of making use of the air sea rescue facilities, through the Irish Coast Guard, with a view to being able to provide transportation in certain circumstances to hospitals. This would not be along the lines of roadside collection as such activities operate under the aegis of a separate helicopter emergency medical service, HEMS, charter that would require specific measures to be in place. However, there is an opportunity to use downtime on that helicopter, which currently is being used for training purposes at no cost. This could improve services to the more peripheral areas that have witnessed a downgrading of accident and emergency services in line with the reconfiguration process. While the latter was the right thing to do from a patient safety perspective, outlying areas in counties Clare, Kerry and Cork could use the facilities of that helicopter adequately, given that the training of the personnel on board is adequate or more advanced then on most ambulances.

I again thank the Minister and his officials for the presentation and for keeping the Estimates so tight. It is good to be able to say this, given the times in which we live. I seek clarification on what is meant by the reference in the section on regional airports to the €4 million in capital saving being transferred from the carbon reduction measure to address the immediate funding difficulties arising from greater operational losses. Aer Arann has been mentioned but perhaps the Minister could state what these are in a little more detail. I also require further clarification on the Minister's comments regarding subhead B5 to the effect that capital savings occurred in the carbon reduction measures as a result of cost reductions on projects and the need to reschedule aspects of projects such as the Sutton to Sandycove cycle way. Is the point to which Deputy Costello referred part of the reason or is there more to this? The phrase "reschedule aspects of projects" could cover a multitude and I seek greater details of what is involved.

In addition, an interesting juxtaposition jumped out at me. I appreciate that the money needed to resolve the Malahide Estuary crisis and to carry out that work urgently certainly was unforeseen. However, is it recognised that the engineering work undertaken in the estuary could be described as a silver lining? The Minister knows exactly where I am coming from on this issue as we have discussed this matter repeatedly. It pertains to the programme for Government, which does not talk about the Sutton to Sandycove cycle way but to the Balbriggan to Bray cycle way. While the Sutton to Sandycove portion is part of that, one must set out one's objectives, no matter how difficult it is to achieve them or how long it might take. The objective should be clear and kept to the fore. In the context of the Balbriggan to Bray cycle route, can the Minister indicate whether the work undertaken on the estuary brings that walkway and cycle way closer? I understand that the current discussions between Fingal County Council and Iarnród Éireann are amicable, constructive and are progressing. I hope they have the full and proactive support of the Department in bringing about this necessary part of carbon reduction.

Finally, I note that although Ireland has reduced its carbon emissions this year, this clearly is as a consequence of the recession first and foremost. I am worried that people's eyes will be taken off the ball and that when economic growth restarts in earnest, Ireland will find itself without the necessary measures to decouple carbon emissions from economic growth. We should be careful not to take our eyes off that ball and should get the aforementioned cycle and walkway up and running, together with the rest of the network.

Gabhaim comhghairdeas leis an Aire agus na bainisteoirí as ucht an bhuiséid mhaith. I concur with the other speakers in congratulating the Minister for having a deficit of €1,000. This is remarkable and might make the case for him to be re-elected next year as Minister for Transport. I certainly want him to remain in office to finish metro north, on which we have worked closely together.

He should be Minister for Finance.

On the last point mentioned by Deputy Sargent regarding the walkway along the Broadmeadows Estuary between Donabate and Malahide, it is important that this facility be progressed, both in the interests of carbon dioxide emissions reduction and of general amenity.

On the Railway Safety Commission, all members understand the reason additional salaries and expenses were incurred on foot of the bridge collapse at the Broadmeadows Estuary. How many people were involved and how many additional permanent staff, if any, have been involved? I assume that some of the costs pertain to the subcontractors that were engaged in the underwater survey etc. The Minister might indicate the likely costs associated with salaries and expenses for 2011. As for the National Transport Authority, I refer to the staff who were transferred from the Dublin Transportation Office, DTO. Am I correct in assuming that the reduction in salary costs from the DTO had an impact on the National Transport Authority accounts and is that reflected in the figures before members? In other words, I seek details on the additional staff and their salaries for the coming year. Finally, in respect of the Road Safety Authority, reference is made to fees income. The Minister should explain how and from where the authority gets income.

I apologise to the Chair and the Minister for not being present earlier. I was speaking in the debate under way in the Chamber and the Minister, Deputy Ó Cuív, who spoke before me, spoke for a little longer than I had anticipated. He could have made his contribution a little quicker.

Had the Deputy attended meetings in Galway West, he might have anticipated that-----

I would have known all about it.

The Deputy might not follow his example at this meeting.

Having scanned through the Minister's presentation and gained a fair idea about some of its contents, I wish to make a number of points. I can understand where the additional expenditure has been required in respect of the establishment of the National Transport Authority and for the Railway Safety Commission. The Railway Safety Commission has appeared before the committee a number of times regarding its role in holding Iarnród Éireann to account, particularly in the context of the Malahide viaduct accident. The commission needs more resources, as it is incapable of doing the comprehensive job required of it.

I welcome that some clarity seems to have been given to the regional airports in terms of finalising their operational subvention budgets. I have raised the issue in the Dáil a number of times, given the concerns of airports in Waterford, Galway, Sligo, Donegal, Knock and so on. I assume the Department is satisfied that there is sufficient operational subvention to ensure all regional airports can at least remain operational into next year. If I am wrong, please correct me.

The Minister might have already answered another question, that is, the transfer of subhead B5 on carbon reduction measures into the regional airports budget. Which measures will not be taken as a result of moving the €4 million? Will the Minister clarify the matter?

My next question relates to the Minister's presentation. It is appropriate to raise the issue of the Coast Guard search and rescue helicopter service now. There is a serious concern, namely, that providing at least a segment of the service that is now being provided through the contract signed by the Minister may have been possible by utilising the Air Corps, which has the staff and suitable equipment to do a portion of the job, although probably not the entire job. Is the Department working with the Defence Forces to determine whether this approach can be adopted? The Air Corps is not capable of doing the job immediately, but we should have been moving in that direction. Our helicopters and Air Corps personnel should be used for offshore search and rescue services in a more proactive way.

I wish to raise two more issues. Regarding the CIE subvention, what level of detail does the Department demand from CIE as the parent company of Dublin Bus, Bus Éireann and Iarnród Éireann in terms of how the money is allocated? For example, what level of detail is required on specific bus routes? Does the Minister deem it necessary to keep CIE as a parent company? Why are we not examining how to provide subvention funding directly to Irish Rail, Bus Éireann and Dublin Bus? What is the added advantage of the layer of bureaucracy that is the CIE holding company? I thank the Chairman for indulging me and I apologise for being late.

Before we go to the Minister, I thank him and his officials for their report and I compliment them on staying within the Estimates. I have two questions. First, it is accepted that regional airports are under pressure. Are there proposals for the rationalisation of airports, particularly in the west? An overall strategy for airport operations in the west is necessary, as it would strengthen the airports and take the fact that we now have motorways into account. We understand from the National Roads Authority that the contract for the Tuam-Gort motorway will be signed in January and that the project will commence early in the new year. In the current climate, the Minister is to be thanked for allowing €500 million to €600 million to be spent on the motorway, which is critical to the economic development of the west, in particular Sligo, Mayo, Roscommon and Leitrim. It is a significant project and we appreciate the effort that has been made.

Second, there is no doubt but that much progress is being made in bus transport through a limited number of initiatives, not least the development of bus lanes. I encourage the Minister to continue in this vein. I hope the Smart Travel initiative will remain in the 2011 Estimates.

I thank the Chairman and members for the constructive way in which they have approached this Supplementary Estimate. I will try to cover as many points as possible. If I miss anything, members can raise it with the Chairman or the clerk to the committee and I will revert to them in writing.

One of the last points was raised by everyone, namely, regional airports. They have taken a sizable hit. The general reason is the economic situation, which means that every airport and not just regional airports has taken a hit. Fewer people travelling means less income for airports. Specifically, the bad weather early this year and the volcanic ash hit the regional airports in a big way and made continuing difficult for them.

A sum of money is set aside at the beginning of the year as a payment to the regional airports in an effort to sustain them. The difference between all of their income and their total costs relates to the operational expenditure, OPEX, element. Due to the difficulties I listed, the OPEX amount was exceeded. Even had those difficulties not arisen, we still would not have had the full amount of money to meet all of the losses of all of the airports. Under a particular formula, airports must get an equal percentage of the money available under OPEX. We cannot subvent one airport 65% of its losses and another airport 35% of its losses. One divides the airports' losses and whatever percentage one can pay must be paid across the board. This is the way the system is set up. Due to the extra losses incurred this year because of the events in question, we found money within our Vote.

General points were made about the regional airports. We have conducted a value for money audit on the area and that report will be considered by the Government shortly. We make three distinct payments to the regional airports under the aviation subhead. These are the OPEX payment, the public service obligation, PSO, payment, which is a subsidy per passenger that is paid to airlines to encourage them to fly into those airports, and the capital expenditure, CAPEX, payment, which is for specific works. For the past two years, CAPEX payments have mainly been confined to safety issues in each airport. Deputy Costello asked about the €5.5 million reduction in the national recovery plan. That amount refers directly to the PSO. The PSO contracts last three years and will finish in the middle of next year. The recovery plan clearly states these will be curtailed. Some may survive, but the PSO rules and regulations stipulate that the airports must be at least three and a half hours away from the capital by road or rail. When we negotiated this three and a half to four years ago, our road and rail infrastructure was not as good as it is now and we were able argue the case that these regional airports fitted within the definition. Thanks to the success of our investment in public transport and in our road infrastructure in recent years, it will be impossible to argue the same case again and I do not foresee us getting leave to introduce PSOs on the scale on which we had them previously; in fact, it will be considerably reduced. However, this remains to be seen and it is something we must argue.

With regard to the helicopter contract, there has been a one-man campaign from a former head of the Air Corps to try to insinuate that a cheaper way could have been found to provide the search and rescue service. I could use stronger language, but it is totally untrue. My recollection of the estimate I received at the time to make the Air Corps capable of providing the type of service about which we are now speaking, which is a much more enhanced service than what we have at present, which is provided by the private sector, is that the difference in cost would have been approximately €300 million. It would not have been able to have been put in place within five years, and this has to be put in place by 2012 or 2013. While this man has successfully peddled this to various news media and outlets I am telling Deputies straight that this is a top quality and top value for money provision of a top-class service.

I have been winched up into these helicopters on more than one occasion and I know how professional they are. However, I have a duty to ensure we have examined the other options.

I absolutely accept that and I am delighted that the Deputy is giving me this opportunity. This is what the committee is about. I have explained it, and I respect the fact that the Deputy was not present previously when we discussed this in detail. This is the way it is; this is the best possible service. I am sure the Deputy will have a chance, if he wishes to do so, to contact the company and examine what is involved in these new helicopters.

Earlier, Deputy Dooley mentioned the HSE using the helicopters as an ambulance service for more remote areas, and talks are taking place. The people who will man these, which is all part of the contract, are very advanced paramedics who will provide life-saving care in the helicopter as soon as people reach it. These helicopters have this facility, unlike the current ones. Deputies will have seen the television series done on this and the professional job these people do. As Deputy Coveney stated, he has been privileged to be on the receiving end of it. This will be improved so much because of the size of the helicopters and the facilities available on them. Perhaps the Deputies will detect from the tone of my voice that I am very passionate about how good this is and very annoyed about the nonsense that has been peddled about it over the past six to 12 months, ably assisted by people - not in this House I hasten to add - who should know better in the national interest.

The next major issue mentioned was the carbon budget and the question was asked why there is so much going from the carbon budget. It is a big disappointment to me that we have unused money in the carbon budget which is now being used elsewhere. The reason for this is simple and straightforward; the bodies responsible for delivering the projects have not been able to deliver them in the time they were given. All this means is the Balbriggan to Bray route, various cycle paths and bus lanes have not been delivered on time. One can blame who one likes about this but in some cases the Part 8 process took far longer than it should have; objections were made in various places because of interference with canal banks and major traffic junctions took longer to design. The local objections referred to by Deputy Costello were in the East Wall area and were connected to the DART underground works, and approximately €3 million could not be spent on it. Various reasons such as these held up the projects.

I emphasise that what this means is that their phasing will take longer; the money is committed for them and they will go ahead. It was a huge disappointment to me and everybody in the Department, particularly the sustainable transport office, that we could not have made greater progress. Great progress was made in other areas such as the national bike week we held for two years which raised public awareness. A great example of what can be done with a good combination of local authorities, local people and local landowners coming together were the projects we did from Newport to Mulranny in Mayo and from Rochestown to Passage West in Cork. These are examples of what I hope, will be done in the years ahead. However, it was not possible to get through the objections to many of these carbon measures.

What percentage of the budget was not spent? What percentage does the €12 million amount to?

It is approximately 40% or almost half of it.

In the area I represent, my experience of it was not happy. I do not know whether there should be a template for local authorities to approach the issue. The Part 8 process was not properly dealt with. There was another major project in the pipeline and it seemed to me that pursuing it in these circumstances would not have worked no matter what happened. Perhaps a template is needed to address these issues. It does not make very much sense to have overlapping projects which will affect the route to be traversed. Will the Minister review this again?

One of the difficulties was that it was the start of a programme. I started this several years ago and tried to move it forward. There will always be teething problems. The Department encouraged this and made grants available. We would have expected that delivery would be made by local authorities and that is the route we went. I am sure the local authorities thought they could deliver when they made their submission.

I do not wish to judge the project or the objections to it but, by way of contrast, in County Mayo we managed to complete 17 km on the Newport-Mulranny route section with the agreement of every landowner along the section, albeit with some slight hitches. That did not cost a penny because people thought the project was good for the area. We are now extending the route to approximately 40 km. Perhaps this reflects the difference between rural areas and urban areas where traffic and other issues arise. It is disappointing but I cannot comment on how well anybody handled it. The money is still available and I hope it will be spent.

Why is the Minister disappointed?

The disappointment comes from the canals premium route and the Sutton-Sandycove road. The other project I mentioned is an outstanding example of what can happen.

It is an outstanding project and it brings considerable benefits to the area.

I have received letters and cards from bed and breakfast operators and hoteliers in the area explaining how much it meant to them this year. I understand three or four bicycle shops have opened, thereby creating further employment in the area.

Deputy Costello raised the issue of the A5, which is part of the Good Friday Agreement. I do not wish to be smart with the Deputy but it needs to be spelled out that County Donegal is part of Ireland. The southern part of the county is already isolated from the rest of the country, and the northern part is even more isolated. It takes approximately two hours to travel from the south of the county to the north. Motorways reach as far as Belfast but one cannot connect to Letterkenny by dual carriageway at present. The road has been improved by bypasses in County Monaghan and Slane will be bypassed. We agreed to fund the A5 project because it is as important to that part of the Republic as it is to the northern counties through which it passes. As far as I am concerned, it is vital. I have been asked about the project on several occasions and I make no apologies for the fact that we are making this investment. It will bring enormous benefits both North and South and it makes sense from our point of view.

In respect of the Railway Safety Commission, the Exchequer paid out €737,000. I will revert to the Deputy if that figure is not completely accurate. In 2009, the total allocation for the commission was €1.8 million, with the levy contributing the remaining €943,000. The figure for 2010 will be €1 million from the Exchequer and €945,000 from the levy, which is an almost 50:50 split. The increased allocation will cover some of the costs incurred during the Malahide investigation but as these were substantially covered in 2009, the 2010 figure will be the allocation into the future. I am not aware of significant increases in employment in the commission in the current economic circumstances. The railway company is now meeting at least half of that cost.

What is the position on CIE?

The Deputy asked about the level of direction. Until last year, the Minister paid as much he or she could get from his or her Cabinet colleagues as a subvention to CIE as a holding company. That money was distributed among the companies based on the information available to CIE. I made it known on an informal basis in meetings with the chair of CIE that I believed the subvention to Bus Éireann should be increased but I do not know whether my advice had an effect in 2010. The Minister has no power to direct where the subvention should be spent. That function is transferring to the National Transport Authority. Last year's subvention was paid to each of the companies through CIE on the basis of contracts that clearly set out the outcomes expected under a number of headings. Previously, the subvention was based on a memorandum of understanding but it is now governed by a contract that can be revoked at any time by the authority.

Why does CIE continue to exist alongside the NTA?

CIE continues to exist due to property and pension issues which would have given rise to serious industrial relations difficulties at the time of its break up into three separate companies. I am sure the matter can be reviewed at some stage in the near future. It is valid to consider whether all the holding company's functions could be transferred to the NTA. However, the immediate problem that springs to mind is that the regulator would also become an operator. That has not worked well in many of the agencies with which I have been directly involved.

The Minister's comment that the public service obligations will be reduced considerably is cause for concern. It is vital that a strong case be made in Europe because our western regions, in particular, are at a considerable disadvantage. Notwithstanding the improvements that have been made to our road networks, we need to maintain connections between regions. I have a particular interest in Galway Airport, which continues to be heavily used by multinational companies. While I accept that the PSOs will be reduced, I urge the Minister to make every possible effort to protect the vital interests of the regions. We must maintain services to the greatest extent possible. I agree with the Minister on the amalgamation of services. The need for synergy between airports such as those in the west of Ireland is critical. However, there are still services that will need public service obligation support, and I urge the Minister to ensure these are retained.

In the four year plan, my understanding is that the intention is to save €5.5 million on PSO funding next year but, because we are committed to PSO funding until July of next year, we are talking about only half of the year. If the saving is €5.5 million in half a year then the saving in a full year would have been €11 million. Yet we only spend €15 million per year on PSOs. What is being budgeted for at the moment in the four year plan is to reduce the PSO commitment by two thirds, which is worrying. In the new year we will need to have a comprehensive debate on this.

I ask members to be brief.

With regard to the three-and-a-half-hour rule, the only place that has been given a new road directly from Dublin is Galway. Places such as Donegal, Sligo, Knock and Kerry do not have direct links. The roads have not gone that far despite their improvement. It seems there should not be that much difference. As the Chairman argued, these are all regional, isolated areas on the west coast of Ireland and a strong case can be made to Europe for continuing the PSO irrespective of what is being done with the roads.

We can reduce the speed limit.

We can certainly do that. It depends on how one uses the three and a half hours. Maybe the cycle paths could be extended - we could save €12 million.

The point about next year is a particularly worrying one. If €5.5 million will be cut in 2011, bearing in mind that the PSOs have been paid up to 1 July, surely we will find ourselves with such a drastic reduction in the amount provided for the PSO that it will not be viable for any airline to seek the service. That would certainly open the door to Ryanair, which says there should be no PSO. As we have seen, there has already been a reduction of two thirds in the service from Kerry Airport. The last thing we need is to allow Ryanair to gobble up those services and dictate how the regional airline service is to be provided. If there is such a drastic reduction in the PSO, no competitor airline will be able to survive. We are facing a dramatic and catastrophic change if that is the level of cutback that will take place.

Having spent the last two weekends up in Donegal, I noticed, taking the road from Enniskillen or Strabane into Donegal, that the roads in the South are far superior. Anyone who is critical of our roads is being a bit unfair. They are far superior in every respect. Even the surface of the roads in the North is inferior.

The report suggests that the Road Safety Authority generates outside fees. I am curious about where these come from.

I apologise to Deputy Kennedy as he did ask that question and I missed it. The RSA receives fees for driver testing and also commercial vehicle testing. It is largely self-funding now in terms of driver testing. The fees were increased substantially last year or the year before and now, the commercial cost of the driver test is almost paid. An interesting consequence is that the number of people who do not turn up for their driving tests has fallen considerably. If they pay €75 or €76 before the test, it means something if they do not turn up.

One does not get a refund if one does not turn up.

No. The test date can be changed twice in advance, but if the person does not turn up he or she is in trouble.

The RSA has been exemplary in the manner in which it goes about its business. Under the Croke Park agreement it has come up with a number of plans for improvements in the service. With regard to the cut in funding for the RSA in the four year plan, the flexibility that has so far been shown by its workforce, whether in the driver testing section or the administrative area, will probably mean there will not be a major increase in fees. The RSA will be able to cope with the reduction by achieving efficiencies. There will be some increase in fees, certainly in the commercial area and perhaps also in driver testing over the four years of the plan, just to bring the level of funding up to meet its costs, but generally, it will be made up in efficiencies, which is what we all want.

With regard to the points made about regional airports, the plan provides for savings of €5.5 million each year from 2011 to 2014, pending the decisions on the PSOs. Savings on PSOs would help; if we can save money in that area, we may be able to transfer it or use it for the core airport management operational expenditure subvention scheme, OpEx, which would probably be of more benefit to airports than the PSO, which is a direct benefit to the airlines. Once the airlines have it and they are flying in, that is helpful to the airports, but in many cases, a direct payment to the airport would be better.

Anyone from the regional airports will confirm how uncertain the funding is. We made a certain amount of OpEx funding available at the beginning of 2009 for the regional airports and were able to give them a little more by scratching around at the end of the year, but the Chairman will be aware of the difficulties caused by this uncertainty in Galway Airport as well as Waterford and other airports. We would like to offer more certainty, and rejigging the money may help in that regard.

The total amount we are talking about for the regional airports is €16.9 million. Currently, there is €1.9 million in OpEx funding, €3 million in CapEx funding, and PSO funding of €12.2 million. The saving we are talking about, which is largely from the PSO funding, is about one third of that.

Is the Minister saying that all of the €5.5 million that will be cut next year will come from PSO funding? If that is the case, it will be a reduction of nearly 50% in the PSO.

I asked about the cost of the helicopter, and I also asked what will happen to the money for the Taxi Regulator when it comes under the auspices of the NTA on 1 December. Will that also require a Supplementary Estimate? In response to what was said about the A5, the Good Friday Agreement and connectivity between Donegal and Derry, it is 12 years since the Agreement and I am not sure that a penny has been spent north of the Border. The €6 million we are discussing has not gone forward because, presumably, the project has not made the expected progress. If we make the motorway, as required, from Dublin to Aughnacloy surely it is not unreasonable to expect that the United Kingdom Government would match it from Aughnacloy to Derry.

The United Kingdom Government is paying towards the cost of that and is more than matching it, to be honest. If I mentioned the Good Friday Agreement, I apologise to the Deputy. I meant the St. Andrew's Agreement which was much more recent. There is a joint steering group and milestones have been laid out. The Deputy may look at the North-South ministerial transport council meeting records where the milestones are laid down, or I can let him have a copy of them. We have made one payment on this; the next is due early next year. There are specific milestones and we will pay over the five years until the project is completed. I have much experience of road projects and how slow they can be, in particular in going through the planning process. So far there has not been any great delay in this project. It has met the first couple of milestones and it is expected to meet the next one early in 2011, in March, I believe. There has not been any undue delay.

The total amount for the public service obligations, PSOs, is €12.2 million. The contracts come to an end in July so we have made provision for that situation. We will not know the amount of money we will need, if any, until a decision is made on the new round of PSOs. I take the Chairman's point about whether we will be able to get some money for this. Obviously, we will make the case to see if we can get approval for routes. I proffered the opinion that the rules are fairly strict and rigid and I would be dishonest if I did not say the chances regarding most of these projects are less than good.

On behalf of the committee I thank the Minister and his officials.

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