Wednesday, 28 January 2004

Questions (10)

Joe Costello


128 Mr. Costello asked the Minister for Transport his views on the tolling of roads, especially given the joint submission made by the National Roads Authority and the National Development Finance Agency; if he has considered this document; and if he will make a statement on the matter. [2112/04]

View answer

Oral answers (20 contributions) (Question to Minister for Transport)

The national development plan provides for significant private sector investment in the national roads development programme. In line with this policy, a number of major road upgrade projects are being implemented by the NRA by means of public private partnerships, with the private sector being remunerated, in part, by user tolls. This will ensure earlier delivery of vital national road infrastructure. Through PPPs, private sector innovation will be harnessed in the areas of scheme design, construction and long-term operation and maintenance.

The NRA's current PPP programme comprises eight projects. In selecting these PPP projects the NRA had regard to a number of factors: a geographical spread of tolls across the network; the extent of service improvement to be provided by the improved route; the availability of sufficiently high traffic volumes to ensure commercial viability and the setting of tolls at an affordable and acceptable level to reduce diversion and gain public acceptance. Having regard to these criteria it is clear that there is limited capacity, over and above the projects already identified by the NRA, across the national road network to support viable tolling arrangements.

Despite the greatly increased levels of investment in the national roads programme, the increased cost of the programme combined with the more difficult economic and budgetary circumstances which limit the capacity to allocate more Exchequer funding requires that we consider all possibilities for generating additional funding to accelerate the implementation of the national roads programme. In this context and that of a broader review of the arrangements for the delivery of the programme, the NRA has recently identified a number of options for the development of tolling policy to enable the NRA to raise additional funding for the national roads programme. These options provide, inter alia, for the consideration, in conjunction with the NDFA, of the possibility of securitising toll revenue. The proposals submitted by the NRA are being considered in my Department.

I asked the Minister about those proposals. I read the newspaper report about the fact that the NRA and the NDFA made a submission to the Minister. I was interested to know his views on that. In the newspaper report the Minister was ducking and diving in an attempt to play both sides over the issue of tolls. He blamed the NRA by saying it would put tolls everywhere if it was given a chance, which should not be allowed to happen. The Minister was putting his usual spin on it.

The purpose of the question was to ask the Minister's view on the proposals those agencies made. If we accept tolls on certain motorways, the submission made by those two agencies seems sensible. Does the Minister accept that the manner in which the Government has dealt with tolls to date on the Eastlink and the Westlink has resulted in cash cows being set up by the private sector with massive incomes being generated over a long period of 30 years? Does the Minister accept that it would make sense for the State to invest in those roads and to receive the tolls as they come in over the subsequent 25 or 30 years?

I remind the Deputy that there is a one minute time limit.

That is a more sensible way to fund major motorways.

The Deputy should be careful about supporting a submission which she may not have read carefully because there are some things in it on which she might have a different view. I have read the NRA report and am studying it. I will bring it before the Cabinet shortly.

What is the Minister's view on it?

I want to discuss it with the Cabinet first and then we will publish it. I will give more detailed views on it at that time. I thank the NRA for and compliment it on the work it has done on this report. It has given it careful consideration. I have difficulty with some aspects of it. There were suggestions, for example, about tolling existing roads. I must study that area carefully.

The principles of tolling are simple. This is not a large country. We can only tolerate a certain number of strategic tolls throughout the country. We cannot proliferate the country with tolls. Any tolling we do must incorporate a state-of-the-art electronic system. That means we should not have any barriers so that vehicles can go through the tolls without having to slow down. I have asked the people at Westlink to examine that. That is technologically possible and is what we must do. The tolls we have must be strictly used to fund the public private partnership elements of motorway developments. I will deal with the NRA report as soon as I can. It is a fine report, although there are aspects of it which must be seriously considered. We will do that as soon as we can.

I am not talking about the detail but about the principle of State finance being used to develop motorways and the State taking the tolls rather than giving them to the private sector. I support that principle and would like to hear the Minister's view on it.

We must be extremely careful when considering any type of tolls because they are a stealth tax on employment and industry, especially in the regions. This country is fast becoming uncompetitive without putting such taxes on decentralised employment and civil servants. Has consideration been given to alternatives to hard tolling? Have investigations been carried out in that regard? Alternative systems are in place in other countries.

What does the Deputy mean by hard tolling?

Hard tolling refers to the system of paying by cash to get through a barrier.

That is what we have.

Yes. Are there alternatives to hard tolling? Franchising services along motorways is one method which has been used in continental Europe. What is the Minister's opinion about tolling roads such as the Jack Lynch tunnel, the Dublin Port tunnel, the M50 and the Portlaoise bypass? These projects have been funded by taxpayers, yet the National Roads Authority proposes to toll them which means the people will pay twice.

Regarding the changes to compulsory purchase orders which were announced in the budget, has the Minister had discussions with the Minister for Finance to relax those in this year's Finance Bill?

Deputy Shortall asked me if the State could keep the tolls. It could do that in theory, but that would involve the State directly running the tolls. As long as we are committed to PPPs, we must reimburse them in some way. If we take in private capital, we must find a way to reimburse it. Deputy Naughten mentioned other ways to reimburse it. One can reimburse it by paying it out of the Exchequer every year.

What about investing the pension fund?

The pension fund is a capital item. I want to be clear about this. The taxpayer is paying for the bulk of the roads. Over the next five years, approximately €9 billion of taxpayers' money will build motorways. Approximately a further €1.5 billion to €2 billion will come from the private sector. If we take the €1.5 billion from the private sector, we must reimburse it either through tolls or a cheque from the Exchequer every year. That is a form of leasing the road.

Why is it not possible to use State finance?

Does the Deputy mean we should not use private funding?

That is an option, but I am not considering it at this stage.