Pat Rabbitte
Question:8 Mr. Rabbitte asked the Taoiseach if he will report on the work of the cross-departmental team on infrastructure and public private partnership; and if he will make a statement on the matter. [21337/04]
View answerTuesday, 9 November 2004
Questions (8, 9, 10, 11)
Enda Kenny
Question:9 Mr. Kenny asked the Taoiseach when the cross-departmental team on infrastructure and public private partnerships will next meet; the number of meetings of the team planned for 2004; and if he will make a statement on the matter. [21435/04]
View answer
Joe Higgins
Question:10 Mr. J. Higgins asked the Taoiseach the progress made by the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [22391/04]
View answer
Trevor Sargent
Question:11 Mr. Sargent asked the Taoiseach if he will report on the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [22474/04]
View answerOral answers (40 contributions)
I propose to take Questions Nos. 8 to 11, inclusive, together.
Can Question No. 5 also be taken now, a Cheann Comhairle? Will the Taoiseach clarify that?
Question No. 5 is to ask the Taoiseach when the Cabinet committee on housing, infrastructure and PPPs last met and its planned meetings for 2004. It is purely a statistical question. We will now hear the Taoiseach's reply to Questions Nos. 8 to 11, inclusive.
I will try to cover it anyway, a Cheann Comhairle. There have been four meetings of the cross-departmental team on housing, infrastructure and PPPs since I last reported to the House. They took place on 9 June, 7 July, 7 September and 13 October. The next meeting will take place tomorrow, and one further meeting is planned before the end of the year.
The discussions at the June meeting focused on major developments relating to infrastructure issues, including progress on key projects and proposals for legislative change. The team also agreed its work programme for the remainder of the year.
The July meeting centred on a report prepared by a legal issues sub-group, assessing the effectiveness of measures taken in recent times to improve infrastructure and highlighting the remaining obstacles. The Department of the Environment, Heritage and Local Government also made a presentation on the regional planning guidelines.
The September meeting focused on progress in addressing the issues raised by the legal issues group report. The team also discussed the infrastructure-related recommendations in the report of the enterprise strategy group. The main theme of the most recent meeting was housing. The topics for discussion at tomorrow's meeting of the team are broadband and public private partnerships.
Overall, the cross-departmental team plays a valuable role in prioritising infrastructure issues to be addressed and, where necessary, proposing possible solutions for consideration by the Cabinet committee specifically and Government generally.
What is the Taoiseach's reaction to the extraordinary revelations made by the Minister of State with responsibility for housing when he told Deputy Gilmore that since enactment of the Planning and Development Act 2000, 196,000 houses had been built? However, under Part V of that Act relating to social and affordable housing only 350 houses have been built, 209 affordable units and 106 social units. For all the brouhaha we had about this tremendous social dimension to the legislation, introduced by the then Minister, Deputy Noel Dempsey, the net outcome is 350 social and affordable houses.
A question, please, Deputy.
Does the Taoiseach recall his Government effectively abolishing that measure in favour of the builders and imposing a levy? In terms of the levy on the housing output to which I referred, 80,000 houses were exempted from social and affordable provisions under the 2000 Act and the levy has been paid only in respect of 400 such houses. Is it not fair for any average person or any citizen awaiting housing to conclude that the Government is more concerned about protecting builders than it is about protecting people looking for social and affordable housing?
Deputy Rabbitte is correct in saying that the number of house completions in the State have reached a record high. Last year was again a record year with almost 69,000 houses built, almost 15,000 of which were in the Dublin area. House completions for the first six months of this year were again up by 21.5% on last year's figure. Indications for the year is for record completions of up to 80,000 more units, which clearly demonstrates that the measures we had to implement a few years ago to boost supply to deal with the unprecedented demand were successful.
The Deputy is also correct in pointing to the scale of activity on new houses. While I cannot recall the figure in the past six years, 350,000 houses were built, which is probably close to one third of the houses in the Republic. From 2002 to June of this year approximately 209 affordable units and 106 social units were completed under Part V of the Planning and Development Act. However, more than 1,000 houses are in progress with a further 1,400 proposed, and this figure is increasing all the time.
When Part V was introduced, people who already had planning permission argued that they should not be subject to its provisions and it created enormous difficulty throughout the country. I cannot recall the number of times I and other Ministers answered questions in the House on this matter proposing that we should allow those with planning permission to proceed and that only new submissions should be subject to Part V. Effectively Part V applies to more recently granted permissions than was originally intended. To help increase supply, which is obviously worthwhile, the Government made the decision to allow people with pre-existing permissions to proceed and Part V applies to any new permissions granted since the effective date.
Part V did not apply as intended, otherwise 40,000 houses would have been provided under the social and affordable provisions and that did not happen. Instead of 40,000 houses, the Taoiseach's own figures refer to 315 houses. Why has the levy that was to apply to 80,000 houses only been applied to 400 houses to date?
Did the Taoiseach tell the social partners, particularly the Irish Congress of Trade Unions, which promoted the issue of affordable housing during the negotiations for Sustaining Progress, that when he said he would build 10,000 additional social and affordable houses, he meant additional to damn all? Did he tell them that no houses were being built under Part V and, as of now, no houses are being built under the commitment to build an additional 10,000? Will the Taoiseach say when the first houses to be built under Sustaining Progress will be ready for occupation?
Part V started to take effect at the end of 2002 and the beginning of 2003 because there was a real fear that the housing supply would cease. Builders and developers played a part in that but they had permissions for these developments and were allowed to finish them. Part V takes effect for new planning permissions — that was the concession we made to deal with the housing supply. If we had not done that there would not be as many houses being built. It was the only way to deal with this issue, other than in Dublin, where there is a better balance between supply and demand and, although the Dublin area has improved, it is still not in equilibrium.
What about the people who cannot afford to buy a private home?
Most of the houses are being bought by first-time buyers. The Deputy saw the recent CSO figures on the issue.
I also saw the number of second houses being bought. What about the people who cannot afford to buy a private home?
We are spending almost €2 billion a year on social and affordable housing. Last year 13,000 units were available to people on social housing lists, the highest figure since 1986. This year's figure will be the same or higher. In recent years we have spent well over €5 billion under the national development plan on social housing, an enormous sum. Under a range of social and affordable housing measures, people's housing needs are being met. There are waiting lists but we are building and allocating more houses and we are also helping in terms of voluntary bodies.
Deputy Rabbitte asked about social and affordable housing. We attempted to designate the land, do the planning, build the houses and make them available in a short time but none of the social partners believed they would be available very soon. The State has identified land in Clare, Cork, Dublin, Galway, Kerry, Kildare, Meath, Sligo, Waterford, Wexford and Wicklow owned by the State or local authorities for the initiative agreed with the social partners. It was not agreed on the basis that the land would be supplied and the houses would be built. As I stated previously, I would like to see it done quickly because it is a year and a half since we made the arrangements. We had to work through the arrangements with the local authorities, the State and the trade union movement on how that could be done. I wish they moved more quickly on these issues.
The exact number of units will have to be determined in planning the projects and it will invariably depend on the need to incorporate a mix of housing and other facilities, but the estimated figure is that there will be 8,891 units. That will leave a shortfall of approximately 1,000. The Department of the Environment, Heritage and Local Government is engaged in discussions with a number of Departments and agencies with a view to securing further lands to meet the shortfall and it is hoped that can be done. The Department of Health and Children and health boards have been asked to identify lands that would have a potential yield to ensure we not only bridge the shortfall but go beyond the expected number. Once the initial planning phase is over and planning permissions for these projects is obtained, perhaps we will be able to move more quickly.
As I said on the previous occasion this issue was addressed, there have also been discussions with builders about land swaps, an idea the Construction Industry Federation came up with in the context of social partnership. That is being examined. If that happened, it could speed up the construction of these houses because, in many cases, going through the planning process with its associated difficulties and arrangements takes a considerable amount of time. The private sector builders state — this was a reason for the change to Part V — that from the time they start the process, as we are doing with these lands, it can take three to four years before they can get through the planning process, the agreements with local authorities about roads, sewerage and drainage works and get the planning permission. That is the point they have made to us and I can see that is the case in some of these areas. Dublin City Council has been very helpful in some of the areas in which it has moved quickly to make progress, as has Fingal County Council. In other areas, the process has been extremely slow but no matter how slow it is, the lands are available and it is a matter of trying to process them as quickly as possible. The State has given the lands and it should supply affordable housing to at least 10,000 people.
On the cross-departmental team on infrastructure and public private partnerships, has the Taoiseach had an opportunity to reflect on the Comptroller and Auditor General's report in this regard which concluded that the five schools built by Jarvis could end up costing up to 13% more than if built by the State? The Department of Education and Science believed it would save the State 6%. Is there not a case to look very closely at the road the Government seems determined to go down in depending more on public private partnerships, particularly when such revelations indicate the figures are wrong and have show them to be bad for the Exchequer and for education?
There are questions hanging over the future of the Cork School of Music and the involvement of Jarvis which, I understand, has had number of contracts axed in the UK on the basis of its status. It is quite a beleaguered company. Is the Government reconsidering public private partnerships and reviewing the situation, particularly in the area of education where they have been found not to be good value and not good for education?
I have addressed some of these issues before. As I said previously, the public private partnership process, not only for this country but for other countries, is a learning one about how one spreads and shares the risk with the private sector. Some countries have embraced the process comprehensively. Spain and Portugal, which are probably leaders in the field, attempt to undertake all capital projects through PPP. We are not using it to anything like the extent envisaged in the National Development Plan 2000-2006 and there are many reasons for this. People will argue that the schools project was a good deal which was completed quickly and efficiently, a design and build financed undertaking and that we should do more. Others argue——
It was not.
It is a point strongly contested by people in education. The other point is that the Department of Finance is correct in its view that the cheapest way to finance a project is for the State to borrow the money. No one can fund a project more cheaply. The whole argument last year was that earmarking the proportion of the capital envelope for PPP would assist in speeding up many projects. We had a long argument concerning the figures used by EUROSTAT and how it dealt with them. That argument changed when it was no longer necessary to put the full cost of a project up front. In a PPP undertaking, only the proportion of the project affecting the year in question is dealt with. It is spread like a mortgage, over 20 years. That makes PPP far more satisfactory. However, it still does not make it more economic than the rate at which the Department of Finance can borrow and that is the central issue. Nonetheless, it enables projects to be moved more speedily, in many areas.
There are different models and it is not always PPP. The Monasterevin road, which was opened yesterday, was not a PPP, but it was a design and build project. In the recent case of the Cork treatment plant, an incentive penalty mechanism was inserted to encourage delivery of infrastructure within set timeframes. In that case, the PPP arranged a structure so that the local authority would only take over a facility when it is satisfied it is operating properly. Until then the developer carries the cost of the operation. While the PPP heading encompasses a broad array of issues, in Europe it is defined in terms of whether there is a spreading or loading of the risk where the private sector may take a share of it. Now we see a number of PPP projects coming on stream, but not many. They are far fewer than envisaged under the national development plan. I do not believe there are any more in the field of education, except the Cork School of Music, which is still having difficulties with the PPP company involved. People are looking at different methods, such as incentive penalties. The Ringsend water plant is a former PPP as well and there are a number of other projects that have been undertaken in this way.
I understand both sides of the argument well. We are doing some and not others, because of the cost issue. However, there is no doubt that it enables a project to be designed, built, financed and become operational far quicker than the other methods. It enables infrastructural projects to be moved with enormous speed. The Monasterevin road was not a PPP, but one should look at the speed at which this project was carried out as well as the Dublin water plant and the five schools. A great amount of time was gained.
The Taoiseach is missing the point. Monasterevin was not a PPP.
The Deputy must allow the Taoiseach to speak, without interruption.
The public sector should not cave in.
It should not be rejected as a concept. In some areas it works very effectively. Eventually, some of these projects must be undertaken, in any event and they could ultimately end up costing much more. I have argued these points with the Department of Finance and it is not a simple area as regards forecasting outcomes, say, over a ten-year period.
Will the Taoiseach say whether the interdepartmental group discussed the proposed M3 motorway the projected delays and the possible damage it will do to the whole Tara-Skryne valley? What is his view on this and has he spoken to all the parties concerned? Why are we pursuing the building of a motorway and the compulsory purchase of land for it without giving thought to the provision of a rail line alongside it? In most European states, railway provision is also considered in the context of buying land to accommodate motorways.
That question may be more appropriate to the Minister for Transport.
I disagree. The Taoiseach is the leader of the country and this issue is one of our most important.
A detailed question should go to the line Minister.
The past leaders of the country met at Tara.
The Deputy should not give him ideas.
The Deputy has been allowed to ask the Taoiseach a question.
The High King.
Is the Taoiseach for Tara?
A Cheann Comhairle, I would like to answer the Deputy's question. I have listened to some of those involved, though not all. I have listened to those who say the motorway will do major damage to the Hill of Tara and I have listened to those who say it has nothing to do with it. The argument common to both sides is that the development will affect the Skryne valley. I have asked archaeologists, who are members of the country's fastest growing profession, and they differ in their views, as the Deputy knows. The NRA and the Department have asked them to come forward with a conclusive answer. As archaeologists, that is their job and it is not for the local authority, Deputy English or me to answer that. I will be very interested to see their conclusions.
The position should be based on facts. I do not agree with having someone stand on the Hill of Tara with a camera and telling people that the motorway will go through it. As the Deputy and I know, it will not. I went down to see how far away the proposed motorway was from the hill.
It is 784 steps.
While I do not know the exact distance, it is certainly further than the existing road. There is an argument to be made about the Skryne valley, but there is none to be made about the hill of Tara which could not be seen from where I stood on the road. I do not see that argument.
While I do not think there is a plan to provide a railway line, it would make sense to place a new line on the existing route. Of course, the matter can be discussed.
It is the NRA——
Deputy, we are concluding Taoiseach's questions.
It is not a matter for the NRA but for Iarnród Éireann. Whether right, wrong or indifferent, for the past six or seven years I moved this country from having a handful of archaeologists to having a posse of them. It will be interesting to see if we will get a conclusive answer.
Posses always follow behind.
Is that the collective noun for archaeologists?
I am sure archaeologists are not like politicians, that they reach decisions quickly. There are enough of them to do so.